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Groupthink applied to social shopping at SXSWi

Five panels deal with the implications of social shopping sites

Omar L. Gallaga
ogallaga@statesman.com

At the South by Southwest Interactive Festival — where, if you squint, you can sometimes see the future of technology in its nascent form — the big buzz last year was for location-based services such as Foursquare, Gowalla and Facebook Places.

For SXSWi 2011, judging from the number of panels on the topic, social shopping might be one of the most-discussed areas of tech.

At least five panels with titles such as "Social Shopping: The Future of Selling Stuff Online" and "Shopping as a Revolutionary Act?" will deal directly with so-called group shopping. In the past year, the quick growth of sites such as Groupon Inc. and LivingSocial (which had competing Super Bowl ads in February) has fueled interest and helped bring about many, many companies like them. (The American-Statesman's parent company, Cox Media Group, owns one of them, Deal-Swarm.)

Panels at the fest will discuss not only the way we shop at these sites, but the privacy implications, the blurring of the lines between ad and editorial content and the way location services will make these deals even more targeted for those looking for a sale or hot discount.

The two largest companies that specialize in daily deals will be part of the festival.

Aaron Batalion, the co-founder and chief technology officer at LivingSocial, will be part of the panel "Group Deals: When Ads Become Content" at 9:30 a.m. Sunday.

Groupon's editor-in-chief, Aaron With, and chief executive, Andrew Mason, will be at "Strange Business: Corporate Creativity That Doesn't Suck" at 11 a.m. Sunday to discuss the company's quirky, humorous culture.

We spoke to With and to Batalion through e-mail about their SXSW presentations and what attendees should expect:

Aaron With

American-Statesman: What are some things you hope to cover on the SXSW Interactive panel? Will this be more of a look at where Groupon's been and how it operates, or will there be broader discussion of the social shopping industry and online business creativity?

Aaron With: I'll be talking about Groupon's creative voice in our editorial copy and marketing initiatives.

With the help of a PowerPointer, I will present a mathematical formula for pre-determining ROI (return on investment) on creative campaigns with zero relevance to any revenue stream.

Even the description for your SXSW panel features Groupon's well-known sense of humor and self-deprecation. Has that been tough to maintain lately given the Super Bowl ad aftermath? (The company was criticized for ads that many perceived as making light of social issues. The ads were ultimately pulled.)

No. Our write-ups continue to use the same absurdist humor they always have, and once we develop new marketing initiatives, those will, too. We know our creativity is often risky, and we're prepared to eat the consequences if we screw up. ... Plus, making our brand weird has been a compulsion first and a strategy second. Even if we wanted to, we probably wouldn't know how to stop.

Are the people who attend SXSW Interactive — early adopters, smart-phone owners, people who practically live online — your ideal audience, or is the company past that point and trying harder to reach the mainstream?

Our ideal audience people who want to get off their couch and try something new. We don't care if you're an early adopter or the last person to get on the Internet, as long as you want to support local businesses and explore your city. We just hit 60 million subscribers worldwide and have definitely begun to reach people who may have just joined Facebook or don't have a smart phone.

Aaron Batalion

What does LivingSocial have planned for South by Southwest? Are attendees of the festival the kind of early adopters who are still fueling your company's growth, or has it gotten past that point and more toward the mainstream?

Aaron Batalion: While we don't have any products to announce right now, we believe this space is just getting started.

We're already innovating outside of the traditional model into new verticals — like Family Edition (which it launched in Austin this week) and LivingSocial Escapes — new mobile offerings and more ways that our consumers can explore their city and the world.

The early adopters are crucial to helping us get those new products off the ground. Stay tuned.

It seems like LivingSocial and Groupon are leading the pack for online social shopping, but there are many, many smaller companies (they pitch us every day). Do you see things shaking out in the next year or two or consolidating? Is there a danger of too much Daily Deal overload as these services saturate the market?

In our minds, the sky is the limit for LivingSocial, and our aggressive growth over the last two years is a testament to that. ... Although it seems very easy to break into this industry, most people don't realize the scale and technology it takes to be successful.

At LivingSocial, we have about 1,000 employees around the globe making sure that our nearly 200 markets are getting the best deals available — from sales people in every single market, to a clever editorial staff, to a great design team, an amazing development team and everyone who supports them.

The recent Amazon/Living Social $20-for-$10 deal got a lot of attention and seemed to do very well. Was that a turning point for LivingSocial?

The Amazon deal was indeed record-breaking. We believe no single product has had more sales in a single day on the Web. Ever. We sold over 1.1 million vouchers and reached a rate of 80 purchases per second. Already, over 85 percent have been redeemed.

Your SXSW panel is about how these kinds of services will affect local publishers and advertising. Do you think services like LivingSocial have done a good job complementing local advertising, or should publishers consider you guys a threat? Will deal sites decimate display advertising the way Craigslist did to classifieds?

LivingSocial offers local merchants a brand-new way to market their businesses. It's a no-money-down method to bring new and loyal customers through your doors.

We've been so successful at delivering new customers that 97 percent of our merchants would run with us again, so you can't deny the success of the platform. That said, I think every business needs to find the marketing mix that is right for them.

What kinds of things are you looking forward to at SXSW, and do you have any tips for surviving or getting the most out of the fest?

I'm most looking forward to meeting passionate people building amazing products. The sessions, hallway conversations and happy hours of SXSW are amazing and incredibly energizing. And if you can make it out to Salt Lick Bar-B-Que, you won't be let down!

ogallaga@statesman.com; 445-3672

South by Southwest Interactive panels

(open to badgeholders and registered day-pass carriers only)

"Strange Business: Corporate Creativity that Doesn't Suck"

11 a.m. Sunday

Ballroom D, Austin Convention Center

"Group Deals: Where Ads Become Content"

9:30 a.m. Sunday

Ballroom F, Austin Convention Center