IP Uh Oh

Groupon Promises to Stop Spending on Things That Don’t Work So Good No More

groupon ceo andrew mason on cnbc Groupon Promises to Stop Spending on Things That Dont Work So Good No More

The old economics.

Groupon filed an amended S-1 document today for its delayed IPO, which has been under scrutiny from investors and the SEC. The startup has been critiqued for the fact that is has had to boost spending to add users to its email list. The filing says the company plans to “significantly” reduce online marketing spending “over time as such investments yield insufficient returns,” reports Bloomberg.

According to the filing, those marketing costs stopped paying off because of “changes in subscriber economics, achievement of subscriber saturation levels in various markets or a determination that subscriber growth objectives can be satisfied though alternative means.”

The company insists that cutting back won’t negatively impact businesses with existing subscribers, although trends have shown users tend to be less engaged and profitable over time.

This filing comes less than a week after the New York Times declared that “the Internet coupon fad is shrinking faster than fat from a weight-loss laser,” along with the note that, “Just a few months ago, daily deal coupons were the new big thing.” Of course, that article was discussing the “fading allure” for merchants and today’s filing is about the difficulty getting consumers to sign up (there’s no mention of how much it costs to convert them into regular users). But it does lend credence to the theory that the daily deals bubble may have already burst.

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