Four days after its offensive ad campaign began, Groupon did the right thing and pulled the plug. CEO Andrew Mason posted an apology on the company blog that was a vast improvement over the explanation he had posted two days earlier. The controversy was an expensive lesson for Groupon; in accepting full responsibility for running the campaign, Mason presumably absolved the agency of any blame. On the other hand, it may ultimately work out to be a worthwhile investment.
Some cynics (including on this blog) have suggested that this whole controversy was scripted for the purpose of creating awareness of the Groupon brand, which it certainly did. I personally don’t buy that the public outrage was anticipated or planned. I don’t think Groupon could have enlisted so many celebrities to lend their names to a program that was designed to offend. This was a mistake, and the company ultimately did the right thing in apologizing and walking away. It gets credit for credibility, humility and fallibility, which are all endearing traits. Groupon may actually get more goodwill lift out of this whole controversy than if it had run tasteful ads in the first place.
Groupon is in serious trouble! They have gotten too big, too fast and it seems that nobody is in control. This is prime time to start taking market share away from them and sites like http://www.livingsocial.com and http://www.freefu.com have an opportunity to sink Groupon.