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Why Social Spending Sites May Not Be a Bargain for Physician Advertising

By Stewart Gandolf, Chief Executive Officer

email money signJust when you thought (perhaps hoping) the various “daily deal” sites had reached their peak, it turns out they are continuing to grow in popularity with consumers. The trouble is, results for hospital or medical practice advertising can be spotty.

Hidden behind the glitz and glamour of worldwide growth, industry observers and studies caution that what works for some small business advertisers may not mean success for others, including doctor, dentist and healthcare advertising.

Of course, colonoscopies and the like are never going to be a “two-for-one” offer (we hope) on Groupon, LivingSocial and similar social spending sites. But, following restaurants/food/beverage, categories that include health, beauty and various elective cosmetic services—both medical and dental—are near the top of the list.

Dealradar.com reports that one of every 11 online deals is for a healthcare service. Dentists, cosmetic surgeons, medical spas and, more recently, hospitals are among the healthcare advertisers.

On the plus side…

Groupon and LivingSocial are the head-and-shoulders leaders in the crowded social shopping sector. According to Edison Research, The Daily Deals Consumer 2012, users are primarily female and have a higher income.

More significantly, “income figures and their higher propensity to join a premium service like Amazon Prime suggests that [these users] are not price conscious, but value-seekers, which makes premium offerings feasible."

But, on the other hand…

A recent study of online shoppers cautions: “It’s clear that group buying sites build awareness and encourage impulse purchase behavior efficiently, but featured companies are failing to convert those shoppers into loyal customers—bringing into question the long term viability of these sites.” (Kantar Media)

The Edison report offers a similar conclusion: “The ‘Daily Deals’ space encourages trial, but loyalty remains an opportunity.”

And the bottom line is…

Social spending sites are not appropriate for all healthcare providers, procedures or services. What’s more, participation by a hospital or medical practice should be cautious about any legal, ethical or regulatory issues.

Many consumers are interested in, and seek value from, ‘daily deal’ sites. Popularity is strong and growing, particularly with higher income women. For those situations where Groupon (or others) is appropriate, testing is also appropriate. While social spending sites may bring a response to a given offer, creating patient loyalty and repeat business does not always follow.

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