Why Newt Gingrich Is The Groupon Of The GOP Race


In a recent American Research Group poll, 50% of likely Florida Republican primary voters said they preferred Newt Gingrich over any other candidate, fueling the media narrative that Gingrich is now the main "anti-Romney" choice in the 2012 GOP Presidential field. Meanwhile, daily deals website Groupon climbed above the $20 starting price of their stock on Friday, then closed at $18.25 per-share after a month of rising-then-falling stock prices since going public in November.

While these seem like unrelated events, there are several parallels between Newt Gingrich's presidential campaign and Groupon's initial public offering campaign that demonstrate the difficulties of gaining and keeping popularity in today's news media environment. The viability of both elected politicians and publicly-traded companies is driven by outflanking competitors and delivering benefits to supporters, and the role of the media is to continually assess their ability to do these things. A comparison between Gingrich and Groupon shows that high-profile organizations can recover from early media scrutiny, but must continually battle to stay viable in the eyes of the media and public.

Both campaigns received heavy criticism early on. Gingrich's campaign had a rocky start, when campaign staffers quit en masse over his choice to take a luxury cruise trip to Greece instead of campaigning in primary states. Groupon faced several criticisms during its filing for an IPO, including concerns over company's growth prospects, unorthodox accounting practices, and the sustainability of the easy-to-copy business model they pioneered. Some even pointed out that Groupon offered a cautionary tale of how to not go public, adding credence to the assumption by many analysts and investors that Groupon's stock would plunge upon going public.

Both campaigns have succeeded in spite of being written-off. Gingrich had been criticized for being one of several unviable presidential candidates to take on Obama in a general election. Now, he has grabbed the spotlight over rivals such as Rep. Michele Bachmann (R-Minn.), Texas Governor Rick Perry, and recent drop-out Herman Cain in the highly competitive primary race. Along with the aforementioned concerns, Groupon had been criticized for being one of several companies fueling a tech bubble, (including LinkedIn, Facebook, and Pandora) that was bound to pop upon going public. Yet they were still able to raise $700 million to launch their IPO, and have remained optimistic about future growth prospects.

Both campaigns are trying to differentiate themselves from competitors. Gingrich has strayed from his rivals' stances with his controversial views on illegal immigration. Groupon is refining its business model by expanding into advertising deals, lowering its marketing and subscriber acquisition costs, and shifting to an e-commerce model.

Both are reliant on measureable support for continued publicity. Gingrich's publicity will remain positive if he can maintain high polling numbers in primary states. Groupon will get publicity based on how high or low its stock drops over the course of the coming days, weeks, and months.

Both still face criticism.  As Gingrich continues his "disorienting"  rise, recent ads from both Rep. Ron Paul (R-Texas) and Mitt Romney have attacked his conservative credentials, which could erode his recent gains. Groupon, meanwhile, has been accused of violating the UK advertising code, which could impact investor confidence in the company's management.

For now, it appears Gingrich is poised to gain in future caucuses and polls, while Groupon is poised to increase its revenue from holiday deals. However, with poll and stock numbers constantly shifting and influencing the daily news cycle, the Newt Gingrich and Groupon campaigns offer two case studies on the difficulties of growing and maintaining public approval for the price of one.

Photo Credit: Gage Skidmore