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#TBT: Is Living Social Overly Dependent on Email?
Jeanne S. Jennings -- Author - The Email Marketing Kit Jeanne S. Jennings -- Author - The Email Marketing Kit
For Immediate Release:
Dateline: Washington, DC
Thursday, October 22, 2020


This article written by Jeanne Jennings was first published by ClickZ on December 22, 2014.

This is one of three articles I’ve written this week on Living Social, the daily deals industry and email marketing; here I present information from eDataSource on inbox placement, read/open rates, and send quantities for Amazon, Groupon, and Living Social.

Back in early November, Living Social announced a reorganization; not surprising for a company that has been struggling, but what jumped out to me in the press release was this quote:

“This reorganization begins to address the need for the company to further focus on reshaping its mission and redefining the market in an industry that is stagnant, and overly dependent on email.”

Full disclosure: Four years ago I wrote a column titled “A Love Letter to Groupon,” the other big player in the daily deals space. The bottom line, for me, was that the daily deals industry was a perfect way to showcase the power of the email marketing channel.

So when I read this sentence in the press release all I could think was, “Would there even be a daily deals industry without email?” What other channel would have allowed them to so beautifully market to so many people at such a low cost?

I reached out to my friends at eDataSource (EDS) and they were nice enough to provide me access to their tool to do a little more investigation into daily deal emails. I initially decided to look at Living Social (sending domain “livingsocial.com”) and Groupon (sending domain “r.groupon.com”); then I added the “Amazon.com” sending domain to the analysis as well.

Why Amazon? Two reasons. First because it was the number one “Overlap” domain listed for both Living Social and Groupon. EDS’ Overlap analysis tells you which other companies an organization’s subscribers are receiving email messages from; I like to think of it as who else is vying for these readers’ attentions in the inbox. In the case of Living Social, 30 percent of its list is also getting email from the Amazon.com domain; for Groupon the figure is 43 percent. (Side note: the overlap between the Living Social and Groupon lists is roughly 30 percent, actually lower than I expected).

The second reason I included Amazon is that they are considered a successful company (not necessarily hugely profitable, but very smart when it comes to marketing and customer experience), and while they aren’t technically a daily deals organization they are in the e-commerce realm. The EDS charts for all three are below, in alphabetical order.

Let’s start by looking at inbox placement (top right of each screen shot).

Year-to-date, Amazon’s inbox placement is 96.8 percent. This is actually a little higher than the non-bounce rate of 96.4 percent from the latest Epsilon Email Trends and Benchmarks Report.

Groupon’s inbox placement was lower, at 93.9 percent; Living Social’s was 91.5 percent, lower still. For every 1,000 emails sent here’s how many, on average, made it to the inbox:

  • 964 of those sent by Amazon
  • 939 of those sent by Groupon
  • 915 of those sent by Living Social

So for every 1,000 emails sent, Living Social immediately has 24 fewer chances to convert a message to a sale than Groupon does; it has 49 fewer chances than Amazon. These missed opportunities add up when you’re sending more than 12 million emails a quarter, as Living Social is.

The next number that jumped out at me was the overall read rate (bottom right of each screen shot). Read rate is akin to open rate; it estimates what percentage of recipients interact at a basic level with the message.

Once again, Amazon is in the lead; its overall read rate is nearly 18 percent. Groupon’s is nearly 13 percent; Living Social is once again behind with an overall read rate of just over 11 percent. To put this in perspective, the average read rate for each 1,000 emails that gets to the inbox is:

  • 177 for Amazon
  • 128 for Groupon
  • 112 for Living Social

This once again puts Living Social at a disadvantage; it has an additional 16 fewer chances, per thousand, to get a sale than Groupon does and 65 fewer opportunities than Amazon.

Let’s broaden this discussion by looking at estimated send volumes. Groupon and Living Social are running neck-and-neck year-to-date, having sent an estimated 51 million and 52 million emails respectively. This Amazon.com domain actually has a much lower send volume year-to-date: just less than 18 million messages. This explains some of the difference in performance; smaller send quantities typically perform better than larger ones.

But this also shows how small changes can dramatically improve performance. In the chart below you’ll see each send domain’s metrics, as presented above. I’ve used them to drive us to raw data.

If you look to the right you’ll also see two “What if” scenarios. If Living Social could meet Amazon’s metrics for inbox placement and reads, it would increase its messages read to date by 3.5 billion. Yes billion. That’s a lift of more than 67 percent. Even if Living Social could just hit Groupon’s metrics in these areas, the raw number of messages read year-to-date would increase by 17 percent or nearly 889 million.

Curious about how much more revenue that might have brought in? Me too. There was so much to cover on this topic that I’ve written two companion pieces to this article, both focused on Living Social and the daily deals industry but with ideas and lessons you can use in any industry to improve your email marketing. Check out:

So does this article provide a blueprint to get Living Social’s email marketing efforts back on track? No, it’s not that simple. But it’s a starting point.

This article written by Jeanne Jennings was first published by ClickZ on December 22, 2014.

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Name: Jeanne S. Jennings
Title: Author, The Email Marketing Kit
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