LivingSocial.com Overpasses Groupon: Is this Because of Questionable Adware?
From Pace Lattin: In one of those things I can’t believe the media didn’t notice, Groupon competitor LivingSocial actually had more visitors this last month. If you notice the graph below from Alexa, LivingSocial clearly was getting closer over the last few months, but in the middle of January overtook Groupon and then had a significant spike in traffic. However, the reason this may have happened is a bit curious.
I wanted to see what Compete.com said, but unfortunately their stats are months behind Alexa. So I decided to look at Alexa and see where the traffic was coming from. This is the click stream chart, which I often use to get an idea of a sites real traffic.
The traffic sources from the last few months are very, very interesting. If you note, there is traffic coming from CPXinteractive, BlueLithium (Yahoo Display), OrbClick and some other advertising servers. These are all display advertising networks that are taking LivingSocial and possibly running it on a CPA, where LivingSocial pays them on a cost per new signup. I’ve seen some of these ads which say “Deal running out in 2 minutes, sign up now” and have some serious questions about that technique — but that’s a totally different blog post. I believe that OrbClick and Nprove are both XA.Net, a great company in SF that has a great exchange tool. (Note, none of these companies are associated as far as I know with the below finding)
That being said, I am mainly concerned about one thing that I’m sure you noticed. 7% of all traffic coming to LivingSocial.com is from Groupon. Is Groupon really sending traffic to competition? Highly unlikely, and not really happening (I checked with Groupon and looked myself.) Instead there is something going on here that I’m sure Groupon would love to take note legally and otherwise — the use of adware. Remember, LivingSocial has a huge CPA campaign that is all over affiliate networks that pays people per new signup. What better way to get people to sign up that pop up a signup form on a competitors website, in this case Groupon.
I confirmed with several affiliate networks that run this and they told me that some of their biggest affiliates indeed are using contextual adware to promote LivingSocial, including TrafficVance, an opt-in adware system. Whether or not you agree with adware, is one question – but the legality of popping a competitive site has been found in the courts to be an issue.
This however goes back to my theory that its very easy to acquire new users.
That being said, what you think Groupon is going to do, faced with this knowledge that users are being stolen by LivingSocial?
Pace Lattin
14 Responses to “LivingSocial.com Overpasses Groupon: Is this Because of Questionable Adware?”
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Here are some links with complaints about livingsocial using adware.
http://support.mozilla.com/en-US/questions/777718
http://www.mywot.com/en/scorecard/partners.livingsocial.com
test
Pace,
One thing to remember about that click stream data is that it registers for the site preceding even if the navigation is browser based and not banner, click, or adware based.
Here is a snap shot for ESPN.com:
15.49% google.com
10.45% facebook.com
8.22% yahoo.com
2.32% youtube.com
The a similar question can be posed here based on what seems to be non-sensical traffic patters, why would espn send traffic to any of the above? It is simply user behavior. To circle back to your example, why is almost 6% of livingsocial’s traffic going back to groupon?
Down stream of Living social:
23.49% google.com
19.77% facebook.com
8.30% yahoo.com
5.49% groupon.com
The likely answer is that these two are so similar that after checking one, people quickly screen the other, a user behavior that I as an Alexa’s user partake in all the time.
One other oddity in Alexa’s some what faulty data is that the Page views per user and bounce rates improve during the spike as opposed to degrade massively which is typically the case with pop/adware campaigns.
There is a difference in downstream to upstream. People are on Groupon, then suddenly on LivingSocial.com. We know there is adware involved, this just shows how much.
I disagree, alexa stats don’t attribute click-stream data properly based on my own personal experience. The “suddenly” you reference can very easily be someone typing groupon.com into a browser. In my own case sites I consult for which have no relation, links, advertising, or connection to my personal sites appear prominently in the click streams of each other as I tend to have both open in one browser session.
Andrew’s point below far better explains the traffic spike than adware or malicious activity, especially when you factor in the fact that page views per user, and bounce rates improved dramatically during the traffic spike. That certainly wouldn’t be the case if people were being bombarded with the level of adware and pops necessary to drive a traffic spike that big. The spike also coincides with the dates listed in the fortune article (post 1/17 pre 1/24) that he linked.
With traffic numbers as high as Groupon’s and LS’s I can assure you that there are issues in both of their respective affiliate programs. I don’t see what you do here relative to LS using adware to target Groupon.
One other note, given their respective ties to Amazon, Alexa’s stats as they relate to LS should be viewed with caution.
Hey Pace,
Had to comment — Can you please let me know exactly what affiliate network has this offer and is brokering it?
As an aside – it’s definitely important to note that LS’s Amazon gift card deal was massive and drove a love of traffic to LS.com in January.
http://tech.fortune.cnn.com/2011/01/24/what-livingsocial%E2%80%99s-biggest-deal-means-for-amazon/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+fortunebrainstormtech+(Fortune+Brainstorm+Tech)&utm_content=Google+Feedfetcher
Also both LS and Groupon’s #2 traffic source is Facebook but it accounts for 70% more of LS’s traffic than Groupon’s.
Maybe a big differentiation in their growth is their LS’s success advertising on Facebook.
Pace,
I keep both of these sites in a bookmark folder and open the folder into separate tabs. I bet that there are a lot of other people who do the same. Wouldn’t this give you the same results on Alexa?
Abe
Abe
It would present itself in exactly that fashion.
As a female consumer and marketer – I check one right after the other in the morning – behavioral targeting?
M
To me, it doesn’t matter if it is adware or not. As long as you are not forcing a browser/user to a site they don’t want to visit. Marketing your product or service to a potential customer while they are expressing an interest in a competitor is just being smart. That’s why one food product has a flashy POP display right next to their competitors in a grocery store. If I am in Old Navy and my cell phone goes off with an offer from The Gap, is that deceptive or smart marketing? In brick & mortar stores, advertisers often run radio ads with an eye towards drawing customers already out shopping. Maybe even ones shopping in another store without Muzak and the local radio station playing. Remember the old tactic of a guy in a wooden “sandwich board” walking around other businesses to draw traffic to their deli, etc?
Are you kidding? That consumers want adware?
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It’s not a theory that you can buy circulation, in any medium. The follow-up question is why.
I wonder if Rupert Murdoch might buy LivingSocial?
[...] affiliates are using adwares to prompt users on Groupon to head over to LivingSocial. According to Lattin: I am mainly concerned about one thing that I’m sure you noticed. 7% of all traffic coming to [...]
[...] affiliates are using adwares to prompt users on Groupon to head over to LivingSocial. According to Lattin: I am mainly concerned about one thing that I’m sure you noticed. 7% of all traffic coming to [...]
[...] affiliates are using adwares to prompt users on Groupon to head over to LivingSocial. According to Lattin: I am mainly concerned about one thing that I’m sure you noticed. 7% of all traffic coming to [...]
I agree with your informations to follow in the livingsocial for improving our traffic using Alexa pagerank methods and graphs..Its a great information to everyone.
[...] had suddenly caught Groupon in a few months and actually over-passed it suddenly in size. LivingSocial vs. Groupon For the investors in LivingSocial.com this news was great to them, but not after they read my [...]