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?