This Woman's Job Is To Convince Madison Avenue That Groupon Won't Kill The Ad Business

silhouetteGorenstein did not want her image used. Images used are of generic silhouettes.

Photo: Flickr, CC / mrhayata

Since July 2011, Groupon has been reaching out to ad agencies to encourage them to include daily deals in their marketing efforts.The campaign is a bold one because in some ways Groupon competes with the traditional and digital arms of Madison Avenue. Plus, agencies tend to jealously guard their relationships with clients and dislike third parties interfering.

The executive at Groupon responsible for convincing Madison Avenue that the discount giant is a friend, not an enemy, is Daniela Gorenstein. She sat down with Business Insider at our recent Social Commerce Summit and told us what kind of reception she’s gotten from the agency world, why she thinks agencies are too hostile toward Groupon, and how Groupon can help their clients.

Jim: OK, to start off, who are you and what do you do at Groupon?

Daniela: My name is Daniela Gorenstein I’m the director of agency development at Groupon. What that means is I am focused on being a liaison, educator, and influencer between Groupon and the agency community at large, meaning advertising agencies, marketing agencies. Ensuring that as the different kind of agencies – creative, brand marketing, digital, media strategy – as they are all to figure out how they are to play in our daily deals space and the idea of social commerce how can I help influence and shape that point of view.

Jim: And did Groupon just start doing that in July or had there been an operation previously?

Daniela: I’m the start. Because if you think about the focus of our traditional sales practice, it’s been 100 per cent client driven. So, I’m a function of the national sales team, which is focused on relationships and sales for national merchants, and the national brands things like the Gap, Old Navy, Jamba Juice, the Body Shop, all of those types of national deal came out of my group. On the flip side, you have all of these agencies, marketing agencies, that have big influence in the national brand space. There was not time or effort put to those people because it wasn’t really understood how can they really get involved, what do they really need to understand about our business.

Jim: And the flip side to that is that there is an argument to be made that Groupon could be ruining some agencies’ businesses, because you are coming in with this fantastic product which has huge reach and a huge audience of driving sales, and clients can see instantly whether it works or not. And the agency business traditionally has disliked marketing where clients can figure out whether it’s working or not, because then clients stop doing it.

Daniela: Well right.

Jim: So when you call up agencies and get the meetings set up, what has the reception been like?

Daniela: I mean, the reception has been great. They've all been very interested to hear from me and very happy that I exist as a person, as a role, and as a function of the organisation because I think what it shows it that we are focused on the agency community and recognise how influential they are at creating those longer term strategic programs. And so, outside of just the one-and-done tests, right, to drive a crazy amount of sales, what does that mean for that national brand next? How can they then capitalise that one-and-done strategy into a longer term marketing play, whether it be by communicating to that audience that they just acquired again with another type of experience and how do we partner with the agencies to help develop that strategy.

Jim: So which agencies have bitten? Are any agencies on board and running campaigns where there's a Groupon aspect?

Daniela: So, that's a great question. So, we are… I say many agencies are facilitating conversations with their clients.

Jim: Is it a three-cornered conversation or are they the middleman?

Daniela: I would say, it's been varying. It really has.

Jim: You can tell the truth!

Daniela: No, it really has. It completely has, there's no black-and-white formula that has been created yet. Depending on where the agency sits, if they're so so close to the brand and we don't have any relationship with that particular brand, they are basically the middleman. OK, with certain agencies, where perhaps we've already done a test with the client directly, but now they're bringing their agency in to help craft maybe a more strategic, or more unique type of strategy, it's more of a three-cornered approach.

Next page: read what Gorenstein has to say about agencies' reluctance to deal with Groupon.

Jim: Can you name any agencies that have run campaigns with Groupon?

Daniela: Actually, not yet. I really…

Jim: Meaning none of them have, or you can't name any?

Daniela: None of them have yet, 100 per cent. Although we haven't yet constructed a daily deal exclusively with an agency on behalf of a national brand, we are very close.

Jim: This seems crazy to me -- If you're an agency and you go to a client and say, OK, we have an idea for a campaign, part of it involves Groupon and you'll be able to see whether it works or not instantly. This is a tempting idea!

Daniela: It is. I can't identify one agency that has 100 per cent taken the reins without their client involved and got a deal done. However, what we're really trying to talk about agencies with is not just about partnering with us on daily deals. Some of the people that were talking about us today recognise that daily deals is just one facet, right, of our company. We're talking about channels such as our products channel, which is Groupon Goods, our travel channel, which is Groupon Getaways, and then our live channel, which is Groupon Live, and then we have Now, which is our mobile platform. So all of these new channels, in addition to the daily deals, how can we think about new ways to insert brands into the mix without talking about a daily deal? Is there a way to include the idea of more of a marketing program or advertising, let's say...

Jim: An ongoing, long-term, more strategic...

Daniela: Or even just inserting a brand who does not want to sell products, but wants to surround itself with a certain lifestyle and activities on Groupon. So, you know, think about the particular customer segment of mums, let's say, that are focused on purchasing deals and experiences for their families on the weekends. There are certain brands that might want to capitalise on those never-been-done-before lifetime experiences and they might want to present a collection of deals. So we're starting to think about, is there a viable brand play for a company who doesn't want to use Groupon to sell products, but wants to use the Groupon platform as a brand awareness appeal and engagement?

Jim: OK, that's really interesting because that's difficult to do, I would imagine. It's not obvious that Groupon should be used as a brand-awareness tool because it's been historically transaction-driven.

Daniela: Right. It's difficult. It's difficult, but we have established meaningful relationships with customers coming back and purchasing and purchasing and purchasing based on our trust. So they are comfortable with the way that we are representing experiences and they want to come back to purchase with us, so how can we take some of that data and insights that we know about people and start thinking about ways to allow marketers to leverage those segments and those insights in more of a traditional media way, if that makes sense.

Next page: read about how agencies have pushed back against working with Groupon.

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