Groupon Won't Buy Super Bowl Ads This Year

By Chris Bentley in News on Jan 6, 2012 5:40PM

Chicago’s small-business-golden-child-turned-pariah Groupon is taking a different tack for this year’s Super Bowl.

After rejecting a $5.8-billion buyout offer from Google last year, an emboldened Groupon bought Super Bowl ad spots that backfired. The snide and ill-advised ads featured Timothy Hutton eating Tibetan fish curry and Elizabeth Hurley extolling the virtues of "deforestation" at a Brazilian wax shop. Groupon CEO Andrew Mason later issued an apology for the ads, and the ads resulted in a paltry 3 percent increase in traffic to their site.

It was an expensive misstep, which is why the daily deal website won’t splurge for another $3.5-million, 30-second ad spot during this year’s game, now that they have cash available from its initial public offering. Even with a coupon, that's pricey ad space.

Groupon wound up raising $700 million in its IPO, exceeding expectations and valuing the company at $12.76 billion. But the shares, which traded on its first day at $26.11, quickly sank under $17. They need to keep costs down and grow profits in the run-up to their second public offering.