Daily deals provider
Groupon Inc. (
and Boston-based marketing services provider Fiksu recently
expanded their 3-year old relationship. The companies signed an
extended partnership deal, which will allow Fiksu to exclusively
market Groupon's mobile applications worldwide.
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Per the latest agreement, Fiksu will use its Mobile App Marketing
platform to market Groupon mobile app in the under penetrated
regions of Europe, Middle East and Africa ("EMEA") and
Asia-Pacific ("APAC). Currently, Fiksu provides services to
Groupon in North America only.
Fiksu's marketing platform uses technology that analyzes user
data collected from different sources, including mobile ad
networks, real-time bidding exchanges and social networks such as
. This thorough analysis helps advertisers to target the right
audience at significantly lower costs (one-third of traditional
providers), which improves their return on investment ("ROI").
The partnership with Fiksu has been beneficial for Groupon as it
boosted mobile traffic significantly in the past 3 years. This is
evident from the fact that at the end of the first quarter, 45.0%
of the transactions in North America were carried out through
mobile devices, which increased from 30% in the year-ago quarter.
Moreover, more than 7 million people downloaded Groupon's mobile
apps during the quarter, which led to a robust mobile business.
North American revenues were up 42.3% year over year to $339.6
million in the first quarter of 2013.
We believe that the extended partnership will boost international
traffic, which is expected to drive Groupon's customer base as
well as top-line growth going forward. For the second quarter of
2013, Groupon forecasts revenues to increase in the range of
$575.0 million to $625.0 million and operating income in the
range of $20.0 million to $40.0 million.
Currently, Groupon expects to spend $15 million-$30 million to
drive new customer growth and overall customer engagement in the
second quarter. We believe that Fiksu's low cost platform will
lower advertisement expenditure, which will boost profitability
However, we believe that the market is getting more competitive
due to the growing interest from technology stalwarts such as
. Moreover, a volatile macroeconomic environment and continued
investments to expand its merchant base are expected to impact
results in the near term.
Currently, Groupon carries a Zacks Rank #3 (Hold).