Brands see high returns from mobile coupons

Written by local5marketing on April 23rd, 2011. Posted in FYI


Reposted from NewMediaAge | Cover story: Brands see high returns from mobile coupons | News | New Media Age.

nma logo Brands see high returns from mobile coupons

Brands from the restaurant and retail sectors are poised to ramp up their mobile marketing activity after Starbucks and House of Fraser witnessed record redemption rates using mobile coupons.

Mobile network operators including Everything Everywhere and O2 are feeding this appetite, with the former preparing to debut its own mobile couponing service later this year.
O2 Media has revealed its debut location-based You Are Here campaign to promote Starbucks’ instant coffee product Via achieved a recall rate of 93%.

nma viewpoint 20 200 Brands see high returns from mobile coupons

Some media planners are still figuring out how best to integrate location-based elements into their media plans. One of the main problems is the difficulty in gathering campaign analytics, since not all retailers can accurately record the redemption of a mobile coupon.

O2 Media’s Nick Pestell points out that each O2 More campaign is researched exhaustively to refine its reporting and how campaigns are pitched to potential clients. It’s only when research figures, such as VoucherCloud’s, and better analytics are more commonplace that we’ll start to see couponing become more popular among advertisers.

Ronan Shields

The Telefónica-owned company has also claimed the campaign, as well as a similar House of Fraser push, generated redemption rates in excess of 14% in the past few months (nma 13 January 2011).

Nick Pestell, O2 Media’s head of agency sales, said the Starbucks campaign was the coffee giant’s first using location in the UK market.

He added that a further 23% of polled users of O2 More, its mobile marketing service, intended to redeem their vouchers.

“This is definitely one of the most popular campaigns conducted on O2 More,” Pestell said. “With a lot of location-based campaigns you typically get a 20-30% response rate, depending on the product.”

However, it remains unclear if Starbucks intends to follow up with a second stage of the campaign.

Mobile couponing has proven most popular with entertainment and retail brands, with the likes of Sainsbury’s also taking advantage of the channel to drive sales.

Anna Corp, Sainsbury’s affiliate marketing manager, said that its use of both O2 More and O2’s incentive scheme Top-up Surprises was key to driving traffic to its online store, and that customers’ control over the type of messages they received was important in building confidence.

“These mobile couponing services allow customers to sign up to receive SMS messages according to their preferences. They can sign up for £10 off a £50 online grocery shop on our website,” she said.

Everything Everywhere, formed from the merger of Orange and T-Mobile, has extended its relationship with mobile marketing company Blyk and plans to offer its mobile couponing technology to advertisers soon.

Clare Messenger, Everything Everywhere’s head of mobile marketing, said the company has signed deals to offer its couponing service to brands. “Working with the coupon system in Blyk’s media platform, and with some newly signed redemption partners, we’ll be able to provide our own coupon offering,” she said, “which we’ll be launching to brands imminently.”

The move comes as the company plans to expand its mobile SMS and MMS marketing service – currently named Orange Shots – across its merged customer base in 2011 (Cover story, nma 31 March 2011).

Both O2 and Everything Everywhere are also planning to improve their analytics capabilities in a bid to answer advertisers’ queries over the effectiveness of campaigns.

An IAB study of more than 1,000 UK mobile owners conducted last October revealed that redeeming mobile coupons was the least popular m-commerce activity ( 14 October 2010).

Only 21% of respondents said they had used their mobiles to redeem a voucher, compared with 40% who had used their phones to find a store location or contact details.

Alex Kozloff, IAB’s mobile manager, said media agencies are interested in using mobile coupons, although they’re faced with challenges when it came to campaign analytics.

“It’s something that agencies are interested in because the concept of coupons offering discounts always performs well with consumers in research studies,” she said.

Media agencies are faced with the problem of mass distribution of vouchers via SMS due to the lack of a pan-operator body selling access to consumers on multiple networks. As a result, they often have to use third parties, such as mobile affiliate VoucherCloud, to reach consumers cross-network and this doesn’t always guarantee scale.

“Other barriers facing agencies include how to get these campaigns to [the mass] market,” said Kozloff. “How can you drive people in store, and then how do you track it?”

Messenger said Everything Everywhere will use Blyk’s messaging platform to offer full campaign tracking by the end of the year.

“With Blyk’s couponing functionality, which we’ll shortly be taking to market, we’ll be able to track the redemption numbers on behalf of advertisers so that clear tracking is possible,” she said.

Neither Starbucks nor House of Fraser were able to provide comment as new media age went to press.

Coupon responses

Affiliate coupons are especially popular in the restaurant, casual dining and retail sectors. Results from VoucherCloud, which distributes discounts across apps and SMS, demonstrate the effectiveness of the platform.

Typical redemption rates for viewed vouchers 5-8%
Typical redemption rates for downloaded vouchers 50%

Campaign results

  • National restaurant chain mobile campaign lasting 19 days:
    Total views 75,000
    Total downloads 8,000 (10.6%)
    Total redemptions 4,000 (50% of downloads and 5.3% of views)
  • National department store campaign, lasting 14 days:
    Total views 49,000
    Total downloads 16,000 (33%)
    Total redemptions 4,000 (25% of downloads and 8.1% of views)
  • National fashion brand campaign lasting one week:
    Total views 39,000
    Total downloads 13,000 (33%)
    Total redemptions 2,500  (19% of downloads and 6.4% of views)

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