Groupon and LivingSocial are often mentioned in the same sentence, like Facebook and Twitter, as the two biggest players in the booming daily deals space. But new data from comScore underscores some of the differences in how they approach the market and how people use the dueling group-buying services.
When it comes to advertising, for instance, both companies are spending heavily to attract customers, but have divergent strategies on where they promote deals. LivingSocial concentrates the vast majority (73%) of its display ads on the top five U.S. Web properties, especially Yahoo and MSN. Within those sites, the ads run chiefly in email and news sections. The rest of LivingSocial's ads are scattered around the Web.
Groupon takes the opposite tack, running only 31% of its ads to the top publishers' site and spreading the bulk (69%) across mid-tier and long-tail sites. Lately, it also been hard to miss Groupon's pop-under ads turning up all over the Web. Hopefully, that doesn't mean LivingSocial pop-ups will begin appearing everywhere online.
Clear-cut differences also show up when looking at the audience composition of each. Geographically, Groupon's user base skews toward the Midwest and Pacific regions, while LivingSocial is stronger in the East. That may, in part, reflect where each is based: Groupon is headquartered in Chicago, LivingSocial in Washington, D.C.
In terms of demographics, Groupon leans more toward younger users and females, while its rival draws more middle-aged users and is split roughly evenly between genders. More than a quarter of Groupon users, for example, fall in the 18-to-24 age bracket, compared to only about 10% of LivingSocial customers.
Among daily deal sites, the two enjoyed the most traffic, with Groupon and LivingSocial attracting 12 million and 11 million unique visitors, respectively, in May, according to comScore. "The comparatively modest email bases of niche and regional competitors suggest they are not yet mounting a serious competition to Groupon and LivingSocial," noted the research firm's Peter Elbaor in a Friday blog post, referring to sites such as BuyWithMe and Bloomspot.
Separate data presented by Yon Nuta, head of product at comScore, at the OMMA Social conference Thursday, suggested traffic to both sites is still growing strongly -- Groupon's online audience is up 250% in the last year versus 182% for LivingSocial.
As of the end of the first quarter, Groupon had about 83 million total subscribers compared to 26 million for LivingSocial. Retaining customers, however, is just as important as bringing in new ones. In that vein, Groupon and LivingSocial fare about the same in getting repeat site visitors, but the latter had a higher churn rate in April-22% compared to Groupon's 18%,
Nuta speculated that Groupon's lower churn rate might might be related to its first-mover advantage, as well as having higher brand awarness than LivingSocial.
The two companies are also focusing on different retail categories when it comes to deals. More than half (56%) of Groupon's offers are for restaurants, while the biggest chunk of LivingSocial's deals (41%) are for books and magazines.
Overall, comScore expects the frenzied daily deal market to triple to nearly $3 billion this year. As a result, one element Groupon and LivingSocial share is skyrocketing valuations. This month, Groupon filed for an initial public offering in a deal that could value the company at as much as $20 billion. LivingSocial's $400 million venture investment round in April would push its worth to about $3 billion.