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Dialing Into Mobile Marketing (by Steve Scherbak)

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Mobile coupon and voucher use in the US Market

Mobile coupon and voucher use in the US Market


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  • 1. Valassis Marketing Solutions 12/23/10 1:08 PM Home | Subscribe | Contact « previous article | This Issue | next article » In This Issue: Dialing Into Mobile Marketing First Quarter 2008 Letter from the Editor Steve Scherbak Angela Martin Corner Office Conversations with Carlos Ribas, Vice President of the Mobile is now a legitimate marketing channel and for the U.S., with nearly 250 Latin America and Caribbean region for million mobile phones active in 2008, one might think we’d be a lot further along in Burger King Gary Yost value-add services for the consumer. Text messaging, mobile Internet and music Dialing Into Mobile download services were interesting five years ago, but where are the services that Marketing Steve Scherbak are meaningful for both subscriber and advertiser? Although the market has seen a Can Uncle Sam Help number of successful mobile campaigns with CPGs and prominent U.S. advertisers, Spur Spending this Spring? there remains great untapped potential around areas within the channel such as Dave Perrine mobile loyalty and mobile coupons. According to Jupiter Research, 24 percent of Opening the Lines of these mobile subscribers are interested in receiving offers and coupons on their Communication Between Trading phones, which equates to approximately 80 million consumers. Partners to Regain Trust Dave Johnson The Promise of Mobile Commerce For several years now mobile commerce has appeared in the media spotlight as the Choose Issue: future of retail around the world, despite the fact that consumers have been Fourth Quarter 2008 somewhat slow to adopt it. We’ve all read compelling stories in the Wall Street Journal and other reputable sources about technologies that would allow our mobile Third Quarter 2008 phones to bring us into the “Jetson era” where the mobile phone truly would act as a Second Quarter 2008 remote control for our lives, enabling relevant information and alerting us to exciting First Quarter 2008 opportunities around us. Fall 2007 The State of Mobile Summer 2007 Promotions and Coupons Winter 2007 The mobile phone does, in fact, Fall 2006 offer advertisers a unique Summer 2006 opportunity to deliver highly Winter 2006 targeted and timely offers to consumers like no other channel. The ubiquity of these personal devices and their “always on” nature make them an ideal vehicle to deliver Subscribe Todayfile:///Users/stevenscherbak/Desktop/Valasssis%20Wk%2007-09/Valassis%20Marketing%20Solutions.webarchive Page 1 of 4
  • 2. Valassis Marketing Solutions 12/23/10 1:08 PM advertisers higher redemption Enter your email address: rates, geo-targeting, time-of- day, day-of-week, and viral features that allow you to forward to a friend. Peter Schatsky, President of Jupiter- Kagan has seen evidence that “small ticket items or spot purchases, along with high- Email Me value coupons, offer the best near-term opportunities for marketers.” Benefits of Subscribing But it really boils down to a careful balance of brand, merchant and type of offer (percentage off, buy-one get one free, etc.). Mobile coupons are, at their core, a good draw for marketers for the same reasons that paper coupons work: A large percentage of the population is looking for a discount They have a highly predictable positive impact on short-term sales. Coupons and their Ecosystem Online coupons are extremely cost effective to distribute. They can be activated via banner ads, email or other promotions; targeting, branding and tighter version control makes this medium very attractive to brands. The online market potential for coupons is enormous and the US market is in its infancy. According to CMS, Inc. a promotions company, consumers printed roughly 697 million Internet coupons in 2006, a 3.4% increase over the previous year, which makes a good case for digital media to play a long term role. How Mobile Coupons Works Mobile coupon distribution begins with a database of retailer offers for a particular geography and/or demographic. A consumer must opt-in through some simple call to action via broadcast media, online or in-store signage before an advertiser can send an offer to their phone. The mobile device becomes the conduit for distribution and once they’ve opted-in, the coupon can be delivered in a number of ways to the consumer’s handset: As a text message with a unique, single use identifier » high penetration As a readable image, bar code or UPC » less than 50% penetration Via near-field communications (NFC) that allows the phone to “pick up” available offers from a retailer’s host network » low penetration (future) Through a software application that is downloaded to the phone, which manages new and saved coupons » less than 50% penetration The Missing Pieces: POS Integration, Presentation and Storage The format that enables delivery of the coupon to the phone isn’t as important as the consumer’s ability to use that offer at the point of sale (POS). Large mobile carriers and several mobile applicationsfile:///Users/stevenscherbak/Desktop/Valasssis%20Wk%2007-09/Valassis%20Marketing%20Solutions.webarchive Page 2 of 4
  • 3. Valassis Marketing Solutions 12/23/10 1:08 PM companies have developed workable device level applications for storage and organization of multiple coupons on a handset, but few solutions offer cross-carrier functionality and scalability. How do advertisers capture what is presented to a clerk at the POS? It takes training, IT resources, programmable and often “open” POS systems that are networked. When data is captured real-time at the POS for a particular transaction, the coupon issuer can better prevent fraud or illegal distribution of an offer. Also, when a mobile coupon can be tied to a purchase transaction, retailers and advertisers can begin to accurately measure impact on sales, redemption rates and a promotion’s specific value to all parties in the value chain. Many technology companies have created ways to display bar codes, issue secure user IDs for transactions and secure 3-D images to the handset, but few companies in the mobile space have come to the market with a compelling solution for everyone in the ecosystem: the consumer, merchant, advertiser and the mobile carrier need solutions that offer reasonably high penetration, cross carrier functionality and measurable valuable. What and Who Is Out There Today (SMS, digital wallets, applications) What paper and online coupons have that mobile is lacking is a scalable platform and central clearinghouse for processing mobile coupons. San Jose-based Cellfire offers a downloadable application that allows subscribers across several U.S. tier-1 carriers to manage coupons and offers available on the Cellfire network. Mobile Posse has also positioned their technology with mobile operators as a way to serve ads and coupons on the home screen (top level API) of a mobile phone, giving the subscriber a visual notification when an offer becomes available, coupled with an application to manage those on the phone. Other companies have taken a different approach, looking to the underlying financial networks and card payment processing terminals in retail locations as the way to securely “clear” a mobile voucher; Great Britain’s iMovo and Eagle Eye Solutions are bringing some exciting commercial opportunities to bear for mobile vouchers. Also worth mentioning is Australian mobile applications company, bCODE, which has come to market with a novel technology that uses Optical Character Recognition in a touch-screen scanner called a Media Hub, capable of reading a block of SMS as a secure code, then printing a paper coupon. Future of Mobilefile:///Users/stevenscherbak/Desktop/Valasssis%20Wk%2007-09/Valassis%20Marketing%20Solutions.webarchive Page 3 of 4
  • 4. Valassis Marketing Solutions 12/23/10 1:08 PM Future of Mobile Coupons and Advertising It’s difficult to say where advertisers should get into the game. Short term, there are solutions emerging that leverage existing infrastructure like SMS (text messaging) and JAVA applications that can run on a multitude of current devices. Long-term, it is likely that Near-field communications (NFC), a technology that allows mobile phones to complete wireless payments and transactions and location-based services (LBS), depending largely on GPS, will drive value-added services like mobile vouchers and coupons. As with most technology, opportunity emerges with each wave of development and advertisers must continually test the waters and pilot new offerings to determine the best mix for their marketing paradigm. Vice President of New Media for Valassis, Steve Scherbak is a noted pioneer in this area with a unique perspective on Internet content delivery, mobile media and infrastructure. He has held key roles with industry innovators such as Mirror Image, mBlox and Enpocket. Through the evolution of this channel, he has worked with prominent national and international brands including MasterCard, IKEA, Reuters Warner Music Group, Cox, Verizon, Adidas, and AOL to develop mobile marketing strategies and innovative integrated programs. Print this article Forward to Others Click on the logos below to view company website Click to email marketingsolutions@valassis.com or call 1.866.558.7338. © Copyright 2008 Valassis Communications. All rights reserved. View our privacy policy.file:///Users/stevenscherbak/Desktop/Valasssis%20Wk%2007-09/Valassis%20Marketing%20Solutions.webarchive Page 4 of 4