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Groupon acquires social commerce discovery engine Mertado

January 26, 2012

There’s no two ways about it: the the key to social commerce lies in discovery.

Discovering things, places, people, locations and yes – even products, services and businesses that someone you trust – or someone just like you – have recommended can be one of the happier ways to find your way through life. It means that you always find relevance, which no advertising platform has ever succeeded in doing.

Discovery is the thing that Facebook still hasn’t mastered because all you can do is throw ads at people that fit certain demographic, geographic, psychographic profiles (and so on). Their social graph is polluted with people you don’t really know, brands you don’t really like, and people that you know – but have absolutely nothing in common with. I mean, I’m Facebook friends with my in-laws, who live hundreds of kilometres away. There is just about nothing that I have in common with them, so why would I want anyone recommending things to me based on their interests?

Discovery is the thing that I’m convinced Google is trying to build but it hasn’t conquered the self-defeating fact that engineers build wonderfully designed products that people don’t understand – and so they lack the social graces that encourage people to embrace it.

Discovery is the thing that holds Apple back from true social commerce, and their lame attempt at doing so via the creation of Ping – was never going to work. Although if you’ve seen my previous post, you’ll know that they’re cashed up enough to make a second attempt.

Discovery is also one of the main things that has made the recent IPO of Groupon so shaky. The group buying concept is sound, but it still requires vast amount of resource to sell it. And if it needs to be sold, then it isn’t really social enough. Groupon (along with other group buying websites) in its current form lacks the ability for consumers to move from one relevant offer to another, and for the same reason, vendors lack the ability to find new customers without significant marketing expenditure to continue to gain users.

The recent purchase of Mertado is the latest move by Groupon to try and introduce some form of social discovery into its operations. While I don’t know that much about Mertado, its specialty was helping consumers find products that matched their interests. Such products, if built into the fabric of the Groupon ecosystem, could start to recommend specific offers to people not just based on what they say they like, what they purchase, and what they click on, but also based on what ‘people like them’ say, do, buy, share and click on. I’ll give benefit of the doubt that Mertado has something going for it, which makes me glad to see the group buying industry finally try and find a way for those 115 million+ email subscribers to get some relevance back into the content they’re provided with in their email inbox every day.

As for me, I got rid of all those group buying emails a long time ago – there’s only so many times I can stand receiving emails about leg waxing offers and day spa treatments before I hit the ‘unsubscribe’.

I’m also interested in chatting with people who are exploring social commerce in Australia; drop me a line on twitter sometime and I would be happy to connect!


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