Ask most US consumers whether they want to receive mobile-marketing messages on their cell phones, and they will usually answer with a resounding "No."
Consumers have been presold that allowing such advertising on their cell phones means they'll start receiving unwanted Viagra ads and messages from a prince in Kenya who wants to give them $10 million.
Nothing could be further from the truth.
Mobile Coupons Are Opt-In Only
Mobile marketing, as well as mobile coupons, is opt-in marketing, which means companies cannot send you mobile-marketing messages unless you've given them permission to do so.
Now, that's not to say the rule isn't violated. But mobile marketing will never be like email marketing.
With mobile marketing, there is an intrinsic cost to send a text message, whereas with email marketing there is no definable hard cost to send more spam. Hence, sending spam to cell phones with no targeting wouldn't work nearly as well from an ROI perspective.
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 United States.
According to a recent study by Scarborough Research, virtual coupons sent via text message are making strides and are a significant force to be reckoned with.
Where We Get Our Coupons
Coupon distribution in the United States is still dominated by the old-fashioned Sunday-newspaper insert (according to Scarborough Research):
- Sunday newspaper: 51%
- In-store: 35%
- US mail: 31%
- Loyalty programs: 21%
- Circulars: 20%
- Weekday newspaper: 17%
- Product packaging: 16%
- Magazines: 15%
- Email or text messages: 8%
- Websites: 7%
Advertisers are always seeking the young and affluent, and mobile coupons pinpoint that market of early adopters. College graduates are 51% more likely to get their coupons from their mobile phone.
Not surprisingly, mobile-coupon users also tend to be young adults; those age 18-24 are 14% more likely to be mobile-coupon users, most of whom are female.
According to a study by Juniper Research, mobile-coupon use is expected to grow 30% in the next two years.
Getting Started With Mobile Coupons
The best markets to test mobile coupons are those with young populations and especially those in college towns.
Providence, R.I., leads the way with 12% of its residents mobile-coupon or email-coupon users. Atlanta; Austin, Texas; Chicago; San Diego; and Washington, DC, are the best big-city test markets. College towns such as Blacksburg, Va., are also great test markets for mobile coupons.
Big brands such as Subway have embraced mobile coupons. What Subway likes best about mobile coupons is that they can reach Subway's target audience when that audience is most likely to buy.
Subway sends text messages to its opt-in database just before lunchtime, when workers are determining where to eat. For those who receive a mobile coupon, lunch is practically decided for them.
Most mobile coupon campaigns start out with the brand's creating a database of opt-in users. Subway, for example, hangs posters near the waiting lines in its restaurants.
When customers are in line, the only medium at their disposal is their cell phone. Customers can send a text message to a short code (e.g., text DIETCOKE to 84444) and immediately receive a text message that enters those customers in a sweepstakes or provides a discount coupon.
That 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 broadcast text messages to that consumer in the future.
A consumer may opt-out of any mobile-marketing campaign simply by returning "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%.
"There's a fine line between sending enough and sending too often," said Wayne. "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 companies going green, mobile coupons fit the bill. They won't end up in a landfill; rather, they will ultimately be erased by consumers' cell phones.
And that's good for all of us—whether or not we are coupon users.