Wednesday, October 14, 2009 tech news: Virtual coupons for mobile savings

By Bob Bentz president of Advanced Telecom Services.

Mobile coupon growth
The mobile phone is quickly becoming the go-to medium for couponing. As mobile advertising struggles to gain acceptance, it is chipping away at the 300 billion paper coupons issued every year in the U.S.

A recent study by Scarborough Research found that virtual coupons sent via text message are making strides and are a significant force to be reckoned with. Coupon distribution in the U.S. is still dominated by the old-fashioned insert in the Sunday newspapers, with 51 percent of us still obtaining our coupons there.

Here's a breakdown of what percentage of U.S. consumers get their coupons from each medium, according to Scarborough Research:

* Sunday newspaper: 51 percent
* In store: 35 percent
* Direct mail: 31 percent
* Loyalty programs: 21 percent
* Circulars: 20 percent
* Weekday newspaper: 17 percent
* Product packaging: 16 percent
* Magazines: 15 percent
* Email/text messages: 8 percent
* Websites: 7 percent

Advertisers are always seeking the young and affluent, and mobile coupons pinpoint this market, which is usually full of early adopters. College graduates are 51 percent more likely to get their coupons from their mobile phone. Not surprisingly, mobile coupon users also tend to be young adults, with those 18 to 24 years old being 14 percent more likely to take advantage of them. Mobile coupon users are also decidedly female. And according to a study by Juniper Research, mobile coupons are expected to grow by 30 percent in the next two years.

Getting started with mobile coupons
The best markets to test mobile coupons are those with young populations. Atlanta, Austin, Chicago, San Diego, and Washington, D.C., are the best big city test markets, while college towns, like Blacksburg, Va., also make great test areas. Providence, R.I., leads the way in mobile penetration, with 12 percent of its residents using mobile or email coupons

Some mobile marketing sites, such as, also allow for each mobile coupon to have a unique tracking code associated with it. With the code, advertisers can determine which customers redeemed the mobile coupons.

Big brands, including Subway, have embraced mobile coupons because the brands can reach their target audiences when those audiences are most likely to buy. Subway sends text messages to its opt-in database just before lunch time, when workers are deciding where to go for lunch. If they receive a mobile coupon, the decision is almost made for them.

Most mobile coupons start out with the brand creating a database of opt-in users. At Subway, for example, posters are hung near the line at the restaurants. When a customer is waiting in line, the only medium at his disposal is his cellphone. By sending a text message to a short code (for example, texting DIETCOKE to 84444), he can immediately receive a text message that either enters him in a sweepstakes or provides a discount coupon.

This is where the fun starts for brands. Once a brand has an opt-in database and an existing relationship with a consumer, it can send text messages to that consumer in the future.

A consumer may opt-out of any mobile marketing campaign simply by replying "stop" to the text message received. According to Anthony Wayne of the Text Message Blog, the opt-out rate for mobile coupons is only 3 percent.

"There's a fine line between sending enough and sending too often," Wayne said. "If you overdo it, and don't send anything of value, consumers will tire of your messages and opt-out more often."

Coupons go green
With more and more companies going green, mobile coupons fit the bill. Most of your mobile coupons won't end up in the landfill, but will ultimately be erased by the consumer's cellphone.

And, that's good for all of us, whether we are coupon users or not.

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