Are You In The Know? The Demographics of Groupon and LivingSocial

June 22nd, 2011

Daily deal sites Groupon and LivingSocial saw their audiences approximately triple in the year to April 2011, with gains of 250% and 182%, respectively, according to comScore’s “State of the US Online Retail Economy in Q1 2011” report. But while both play in the same space, differences have emerged in the geographies and demographics of their users, as well as their deployment of display and paid search advertising.

Beyond the geographic divergence, each provider appears to attract different types of users. comScore found that internet users under 45 leaned toward Groupon, while those ages 45 and older skewed more in favor of LivingSocial. Those ages 12 to 25 underindexed on usage of daily deal sites in general, but underindexed less strongly on Groupon. Both sites were used by women more than men.

But Nielsen found the opposite age skew when it examined the sites’ demographics in March 2011. That analysis found that 33% of LivingSocial visitors were ages 21 to 34, compared to 25% for Groupon, while 51% of LivingSocial visitors were ages 35 to 64, vs. 57% for Groupon.

The dynamic nature of users opting in and opting out of Groupon and LivingSocial’s emails may, in part, be responsible for driving changing user demographics from month to month. This is a plausible scenario given consumers’ fickle spending behaviors and the services’ monthly churn rates.

In April, Groupon’s churn rate was 18% while LivingSocial’s was 22%, according to comScore. As of Q1, Groupon had about 83 million subscribers compared to LivingSocial’s 26 million.

Where advertising is concerned, while neither Groupon nor LivingSocial skimps on spending to attract users, they place a different emphasis on how they promote their deals.

The comScore analysis found that LivingSocial concentrated the majority (73%) of its display ads on the top five US Web properties, particularly Yahoo and MSN where the ads run mainly in email and news. The rest of the ads ran throughout the web. Groupon, however, ran only 31% of its ads on top publishers’ sites, spreading the majority (69%) around on mid-tier and more obscure sites.

Another strategic difference between the two providers, comScore noted, is that more than half (56%) of Groupon’s offers were for restaurants, while the hefty portion of LivingSocial’s deals (41%) were for books and magazines.

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