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LivingSocial targets offers to boost mobile downloadsBy
LivingSocial has seen a 200 percent incremental lift in the conversion rate of users who click on offers that are targeted to them as the daily deals platform seeks to drive installation of its mobile apps with more personalized offers.
The company is hoping that delivering mobile offers that are customized based on data collected from past offers will help spur a revival of consumer interest in the platform on mobile. LivingSocial and rival platform Groupon are seeking to leverage the rapid growth in mobile use by consumers to their advantage as they diversify from their origins as email-based delivery vehicles.
“We want more app installs,” said Mike Bidgoli, vice president of product at Living Social. “We need to move our desktop business to be a mobile business.”
Washington, D.C.-based LivingSocial also recently added a new personalized “Daily Gem” — an email offer that promises an extra 15 percent discount but must be used by 3 p.m. that day. Like the offers seeking to drive app downloads, the Daily Gem deals are also customized by location.
The efforts to increase the personalized nature of its offers comes as LivingSocial undergoes a leadership change. LivingSocial in July said Gautam Thankar, who had been general manager of advertising at eBay, is scheduled to take over and president and CEO of LivingSocial this month. He succeeds Tim O’Shaughnessy, who announced plans to resign earlier this year.
John Bax, LivingSocial’s chief financial officer, also stepped down at the end of July. Dan Federico, the company’s treasurer and vice president of finance, was named interim CFO.
Both LivingSocial and Chicago-based Groupon — the two leaders in the daily-offers landscape — have struggled to keep consumers interested in the platforms.
Amazon.com has a 31-percent interest in Living Social, valued at about $94 million. The Seattle-based e-commerce giant reported in a filing on July 25 that LivingSocial saw its revenues decline by about 25 percent in the first six months of the year, to $152 million.
Groupon, meanwhile, has described its latest efforts as seeking to “pull” in consumers with relevant offers, rather than “push” deals out to them. It is scheduled to report its second-quarter earnings after the market closes on Aug. 5.
LivingSocial has been working for the past year with AppLovin to improve the targeting of its offers by feeding the application concern data on which what types of devices were looking at what types of deals, and which deals its users were downloading. AppLovin can then feed offers to individuals based on aggregated data derived from these patterns.
“Every single customer sees a set of recommendations that are highly relevant to that customer,” said Adam Foroughi, CEO of AppLovin.
Location is a part of that calculus, he explained, although the offers are not targeted using beacon-type technology. Instead, they are created based on users’ own search behavior within geographic areas and the preferences of others in that area.
In addition to tripling the incremental lift in conversion rate for those who click on the ads, the campaign to drive more relevant offers also has more than doubled the number of conversions for those who see the ads but don’t click, Mr. Foroughi said. That is measured by people who see the ad on mobile and then later sign up for LivingSocial on another device.
“What that basically means is that they can generate a return on their campaign in a short amount of time,” Mr. Foroughi said. “It is a matter of weeks, not months.”
Currently more than 55 percent of LivingSocial’s traffic comes from mobile. LivingSocial used AppLovin’s mobile marketing platform to both acquire new customers and re-engage users with ads that offer dynamic recommendations.
The lifts in conversion rates were measured in a test in which a control group of LivingSocial users who did not see ads were measured against those who did see the dynamically generated ads.
Mr. Bidgoli said the campaign has helped LivingSocial do what it could not have done on its own.
“One of the hardest thing to do is personalize who gets what kind of message, and in what context,” he said. “With an inventory of 15,000 deals, how can you do this across all channels?”
Mark Hamstra is content director at Mobile Commerce Daily
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