Groupon Planning to Slash Online Marketing Spending

Groupon Inc. today said that it intends to substantially slash its online marketing spending. Groupon, which rejected a $6 billion takeover offer from Google Inc. (NASDAQ: GOOG) last year, disclosed its plans to cut online marketing spending in a SEC filing. The filing was made in connection with the company’s much-awaited initial public offering.

Groupon said in the filing that it spent $345.1 million on online marketing in the first half of thus year. However, the company noted that the resources currently being devoted to online marketing initiatives are not generating sufficiently attractive returns.

The Chicago-based company said that it would substantially decrease spending on online marketing. The company’s plans to slash online marketing spending are a reversal of a internal email in August in which it’s CEO; Andrew Mason wrote that the company is currently spending more than just about any company ever on marketing. Mason wrote in the email that the only reason the company spends so much on marketing is because it works.

Mason also wrote in the August email that the company would eventually bring down marketing costs just as fast as it ramped it up. He noted that the company is not paying attention to marketing budget in the way a normal company would.

In the email, Mason also took a dig at rivals Google and Facebook Inc., saying that the sleeping giants have woken up and the numbers are showing that what was proven true with literally thousands of others is just as true with the incumbents of the Internet.

Groupon has included the leaked email in today’s filing with SEC as the company continues to prepare for its much awaited IPO. The company had initially planned to postpone its IPO due to the turmoil in global equity markets, however, it later decided to go as per schedule.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.