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A starter guide to mobile coupons

A starter guide to mobile coupons Bob Bentz

Ask most U.S. consumers if they want to receive mobile marketing messages on their cellphones, and they will usually answer with a resounding "no." 

Consumers have been pre-sold that allowing advertising messages on their cellphone opens the door to all those unwanted Viagra ads and messages from a prince in Kenya who wants to give you $10 million.

Nothing could be further from the truth. 

Mobile coupons are opt-in only
Mobile marketing and mobile coupons are opt-in marketing. This means that companies cannot send consumers mobile marketing messages unless they've given them permission to do so.

Now, that's not to say that rule isn't violated sometimes. But mobile marketing will never be like email marketing because there is an intrinsic cost to send the text message, as opposed to email, where there is no definable hard cost to send another spam message. Hence, sending spam messages to cellphones without targeting simply wouldn't work from an ROI perspective.

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 84444.com, 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.

Bob Bentz is president of Advanced Telecom Services.

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Bob Bentz helps advertisers, agencies, brands, and media partners sell more via a mobile first approach to digital marketing.  Bentz is president of ATS Mobile, a division of Advanced Telecom Services, which provides the following services to...

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to leave comments.

Commenter: justin bryan

2010, July 02

Mobile marketing is the new tread of marketing products because of uses of mobile phone. According to recent survey about 90% US people read sms and this shows how people interested in mobile. Sending sms through shared short code or own brand short code to customer helps to reach your products to customer. Short code is now used by all popular reality shows, programs, games and election campaigns to send or to populate their message to targeted audiences.

Commenter: carolyn joseph

2010, June 01

txtimpact.com is a US based company engaged in providing sms gateway, bulk sms, mobile contents delivery(like ringtones, wallpapers, videos, images, animations)and mobile marketing solutions and platforms.


Commenter: dave andrew

2009, December 18

"Hi Everyone, I came across this coupon site that allows you to get coupons on your iPhone and other cell phones – it's pretty amazing, they offer restaurant coupons and big retailer coupons from Macy's and JC Penny. Check it out: www.rivepoint.com "