The current economic climate has changed the spending
behavior of American consumers. As people adapt to recessionary
times by cutting spending and tightening
belts, a new type of consumerism has been born.
Top economists believe this shift to conservative spending is
not a passing trend but will actually become the “new normal,”
much like the change that occurred in consumer spending
after the Great Depression of the 1930s.
The ranks of Americans who state they have permanently reduced
spending are continuing to rise, pointing toward a more
frugal consumer environment once the current recession ends.
A June 2009 Business Wire survey showed that 20 percent of
Americans say they have cut back for good on spending. To
capitalize on the demand for savings, businesses are increasingly
using coupons as a promotional tool to maintain or increase
market share, attract consumers to their locations and
introduce new products and services in this new economy.
In addition to their attractiveness to consumers, coupon promotions
are also winning favor with marketers who are being
held accountable to track and measure program effectiveness
and demonstrate the return on investment for programs.
The trackability of coupons helps marketers use their budget
dollars efficiently and with clear, tangible results at a time
when ad spend is more closely scrutinized.
Beyond traditional print couponing, mobile couponing has
been growing along with other forms of digital coupons including
emailed coupons, online coupon Web sites and even
discount offers marketing by social media channels.
According to Experian Simmons 2009, since last summer, the
growth in digital coupons has increased markedly: some 44
million adults printed coupons from the Internet, which is a 21
percent increase from the same period last year.
In 2010, Yankee Group expects the number of mobile coupons
redeemed in North America to rise tenfold, with triple-digit
increases to follow in 2011 and 2012.
Mobile couponing is on pace to continue to increase in distribution,
use and redemption. This is largely due to the increase in Internet
use, SMS texting, smartphone
adoption and mobile applications
leveraging the promotional vehicle
as part of a content offering.
SMS text and MMS rich
media couponing
Harris Interactive conducted a
survey and discovered that 42
percent of adults ages 18-34 and
33 percent of 35-to-44-yearolds
are interested in getting
opt-in mobile alerts from their
favorite places.
The study also revealed that about 90 percent of mobile users
have made impulse purchases while shopping due to a sale,
with 22 percent of these shoppers doing so on a weekly basis.
The findings of the study pose implications for advertisers as
these businesses can build their database of consumer contacts
in the form of opt-in mobile numbers and additional information
captured from registrations which can then be used
to advertise new products, specials and promotions.
To be successful in this space, a recent Valpak study of Echo
Boomers, also known as Generation Y or millennials, suggests
that adults ages 18-27 are extremely interested in mobile
marketing – but with some reservations.
When asked about mobile marketing in a Valpak-sponsored
survey managed by Cox Enterprises Inc. and Communispace
through its shared Project Echo program, respondents reported
some fear of disclosing their personal mobile number, handing
strangers their mobile phone and the potential expense to
them if they are too heavily messaged. However, more than
half said they would be interested in receiving offers from
businesses that they frequented or were of interest to them.
Study participants stated that dining and entertainment
coupons were among their most preferred categories. Overall,
the quality of the text offer and its relevance to their lifestyle
were key to their satisfaction and willingness to participate in
mobile marketing.
The challenges associated with both SMS and MMS
(multimedia messaging service) couponing facing advertisers
is how to reach consumers with their messages and offers.
Legal restrictions surrounding messaging can hinder businesses,
so a pull-strategy with double opt-in is the best practice
to avoid pushing unwanted messages to consumers.
Used in conjunction with a print ad campaign, getting the
SMS pull campaign out to consumers has the added critical
advantage of an integrated media effort, which helps increase
ROI and response result.
Mobile campaign challenges and opportunities
The first challenge to any mobile messaging campaign is obtaining
mobile opt-ins. This can be achieved by leveraging a
best-practice approach with pull campaigns and using common
marketing channels such as direct mail, print ads, point-of-sale
display and email messages.
Providing a targeted, compelling
and relevant offer to a
targeted audience which
clearly understands what mobile
messaging they will receive
and how often they will
receive it is the key to building
a qualified and receptive optin
mobile database.
Budget and frequency are potential
challenges when it
comes to planning. In short, it is
best to expect the unexpected.
It is critical to consider the
number of customers and messaging
frequency when there is a limited budget for
SMS/MMS messaging. And if businesses are paying for each
response with a double opt-in, they must be sure to budget for
a better-than-expected response.
These issues should be planned for in advance by the media
firm, agency or messaging service provider, which should provide
an adequate estimate of response and thus help with potential
staffing, product and service delivery and other
planning issues.
By tracking coupon use and redemption, as well as leveraging
customer-provided preferences collected at registration, advertisers
can tailor their messaging to provide customers the
right offer, at the right time, at the right location.
By measuring redemptions, businesses can monitor and track
time-of-day and day-of-week to see peak use of the offer and
correlate that information to the success of an
advertising campaign.
Redemptions can also reveal promotional success by looking
at upsells and cross-sells as a result of the coupon or offer.
SMS text message coupons will continue to grow in their
usage. But as more consumers adopt smartphones, the trend
toward providing rich media coupons – electronic versions of
print coupons, bar coding or video ads with offers – such as
those provided with mobile applications will also continue
to grow.
According to Scarborough Research, 8.6 million, or 8 percent,
of U.S. households currently acquire coupons via text messages
or email.
Whether businesses use SMS texts, MMS images or videos to
provide coupons that incentivize consumers to make purchases
at their locations, mobile couponing is here to stay.
But perhaps the most important aspect is that businesses can
learn more about their customers to develop loyalty programs
based on customer-provided information and track response
and redemptions associated with mobile coupons.
Mobile application growth
Market research firm IDC projects the number of applications
for the iPhone will nearly triple to an estimated 300,000 by
the end of 2010 and that there will be 50,000 to 75,000
Google Android applications, up from 17,000 in 2009.
Mobile coupon applications should see similar growth rates
as retailers and other industries look to reach consumers
closer to the point of sale.
Location-based services (LBS) use GPS to serve consumers
coupons, offers and discounts within a given location and are
a logical fit for businesses looking to increase their advertising
reach and target consumers with intent-to-purchase behavior.
Mobile coupon applications that use
geotargeting are an effective way for
businesses of all sizes to promote their
products and services to consumers
looking to save at their favorite stores.
Mobile applications featuring coupon
content have the added advantage of
being able to track when and where offers
are searched for, served up, viewed
and redeemed.
The mobile application market is currently highly fragmented
and is complicated by a combination of closed and open
source mobile operating systems, device-dependent systems
and applications, and wireless carrier rules and control desires.
Many other mobile applications will increasingly incorporate
coupon content as a content value-add as platforms become
more open.
In the future, as mobile coupon, discount and offer data feeds
are implemented across open platforms, these data pushes
will help drive the growth in mobile applications.
Coupon clickers
According to a December 2009 Borrell Associates study, some
400 billion coupons will have been distributed nationwide in
2009, with a 2 percent average redemption totaling $40 billion
in consumer savings – $87 million of that from mobile
couponing – and resulting total purchases exceeding that
value by a large factor.
The increase in coupon use will likely outlast the economic
downturn as marketers gain a deeper understanding of how
coupons affect shopping behavior and as more companies
learn how to successfully employ them.
Local businesses are embracing coupons this year, with the
value of their coupons jumping more than 50 percent, according
to Borrell Associates.
Consumers are interacting more with mobile marketing as they
learn their phone capabilities and acquire newer technology.
In November 2009, a comScore MobiLens study revealed that
U.S. smartphone adoption increased 63 percent to more than
33 million users and touch-screen mobile phone adoption
grew 159 percent to 23.8 million users in August 2009 from
the year-ago period.
Media buyers are using mobile advertising more, as it is interactive
and allows them to do more with less.
BIA/Kelsey predicts that mobile local search ad revenues will
grow to $130 million by 2013, and that mobile local searches
will increase to 35 percent of all searches by 2013.
More companies are leveraging mobile couponing as a vehicle
for engaging consumers, given that they are highly desired incentives
that drive transactions at the point of sale.
According to a November 2009 Juniper Research study, the
availability and convenience of digital coupons are attracting
a newer and younger base of consumers, many of whom use
Twitter, Facebook and other forms of social media.
These trends are expected to contribute to a projected 300
million global coupon users, who will generate close to $6 billion
globally in retail redemption value by 2014.
The outlook for mobile couponing is bright due to the new
economy, growing consumer demand for mobile coupons, the
increased availability of mobile messaging platforms and
emerging technological trends.
As more rich media applications such as Adobe Flash – projected
to be supported on most smartphones by the third
quarter of 2010 – are distributed, and the number of open
source operating systems such as Android increases to facilitate
mobile application development, technology and communications
innovations will undoubtedly increase the
application and use of mobile coupons.
Also aiding in the growing acceptance of mobile coupons is
the role of broadband 4G/LTE wireless networks deployed to
support HD video, gaming and more powerful mobile applications.
Expect mobile coupons to grow at a fast clip.
