Our last Assignment in Week 1 of Mobile Advertising and Design was to answer this question:

“In what ways do you feel that companies are using mobile technologies to target you regarding their products and services?”

A great article on this subject is in the New York Times.  Written by Stephanie Clifford, it was published on April 16, 2010 and is titled “Web Coupons Know Lots About You, and They Tell” [http://www.nytimes.com/2010/04/17/business/media/17coupon.html].

Companies who use mobile advertising target potential customers by:

• Geographical information contained in the phone
• Interests
• Specific Social Media Pages (YouTube, Facebook, Twitter, etc) that can also bleed Sex (M/F), Age and other “private” information
• Search queries
• The customer’s IP Address

All of this is invisible to the customer.  It’s not ‘general’ information either.  These coupons can get eerily specific, virtually following you to bed where it knows what kind of sheets you have!

These merchandisers use a company called RevTraxx who has no privacy policy.  They get around the privacy policies of Google and can even trend your IP address – if you have a proclivity for downloading pizza coupons on Friday afternoons – you may soon find one already there!

In a worst case scenario, as the article points out, companies with this kind of personal information can offer you substandard products than they might offer another person; or the same product but at a higher price than the next person.

Privacy advocates are very much alarmed by this activity and the article quotes Ed Mierzwinski, the Consumer program Director for USPIRG as saying “There really have been no rules set up for this ecosystem”.  Now, USPIRG is asking the FTC to tighten up online advertising privacy rules.

The next topic we studied this week was Mobile Coupons.

In my previous post, I wrote about how JC Penney launched a mobile coupon campaign as a pilot project in Houston, Texas in September, 2009 that involved 16 of their metro stores.

Their customers had to sign up to receive the coupons, and once they did, they could redeem them at the point of sale for a discount without ever having to print them out.  This would avoid forgetting them at home and give the customer more control over their purchase.  In turn, it was a way for JC Penney to tie directly into the end-user experience.

The focus was on retaining customers, and building brand awareness, as well as acquisition of new customers.  JC Penney also wanted to see how the consumer would interact with the coupon and how it would actually work in the store for redemption.  These coupons would be exactly like coupons that would be sent to other consumers via direct mail.

JC Penney expected to reach a younger demographic who are more apt to be avid cell phone users.  Their target demographic would be female, 25 to 44 years old.

They were willing to invest in this trial to see if their redemption rate would be similar to the 10% to 20% that other brands were reporting.

“Do you feel that JC Penney will find success with their “mobile couponing” pilot project?

I was certain that it would be successful enough for them to continue a mobile coupon program, it’s just too easy for the customer since they carry their phone with them everywhere they go.

Further research indicates I was correct, an article published in the Plano Courier Star on February 4, 2010 reports that JC Penney will take advantage of the mobile advertising opportunities and modify their program to include all store locations.  Instead of the 2D scannable image they previously included in the mobile ad, the store clerks will manually enter the coupon code and use new “hot buttons” on the register.

Their provider, Cellfire, reports that “the average redemption rates for paper coupons is about 1%, while the average redemption for a mobile coupon is between 15% and 25%”.  They also reported that “during the five consecutive quarters beginning October 2008, consumer coupon use increased 16.7% and brands issued 367 billion coupons in 2009”.

Do you think “mobile couponing” is a fad or a sign of the times?

Mobile couponing is definitely a sign of the times.  I definitely believe it will be extremely successful.  Reports of success are everywhere.  One recent article titled “What a Girl Wants:  More Mobile Advertising”,  by Jolie O’Dell, cited these statistics for Mobile Advertising:

• 85% use the mobile Internet almost daily.
• 70% expect their mobile Internet usage to increase in the future.
• 84% have noticed mobile advertising, and 57% have clicked on mobile advertising.
• 67% are interested in receiving mobile coupons or vouchers.
• 93% are always on the lookout for bargains.
• 93% like being up-to-date with new technology.

Those are some pretty convincing numbers when it comes to deciding on whether to launch a mobile coupon program!

Additionally, 86% of these women stated they accessed Facebook, Twitter and similar sites with mobile advertising, and you have more than one way to launch your coupons!

More and more online coupon start-ups are popping up.  One I just found from my “hometown’’ in the Tampa Bay area of Florida called “Send Savings.com”  allows mobile users to sign up for coupons and discounts, determine how many times a week they want to receive the offers, and for each time they get one, a donation is made to their favorite charity.  They use text coupons.

Sources:

http://www.dmnews.com/jcpenney-takes-coupons-mobile/article/149790/

http://www.planostar.com/articles/2010/02/04/plano_star-courier/news/148.txt

http://mashable.com/2010/05/05/women-mobile-shopping/

https://sendsavings.com/signup/individual.php

This week in my Mobile Advertising and Design course, we are studying digital coupons.

This assignment is based on an article dated November 11, 2009, titled,  “Coupon Clippers Drive Incremental Sales”.

The article cites that digital couponing is on the rise and 1 out of 3 consumers report using more coupons than at the same time a year before, and that males age 18 to 34 were doing more comparison shopping and actively searching for coupons.  Further, as much as 59% of consumers will forsake name brands for generic brands based on price.

The next question raised by the article is whether the coupons drive incremental sales or cannibalize existing sales.  The study found that coupons do, indeed, drive incremental sales by as much as 40% and those customers are either new or lapsed buyers.  The study also cites that 63% of the redemptions drove incremental volume and did not cannibalize existing sales.

Our instructor then posed the question:

Does “digital couponing” cause consumers to forsake brand name products over cheaper products or services?

To that question I would have to say no.  I believe that digital coupons help drive the sales of name brands over generics when the coupon brings the price inline with the price range of the generic.  If I am shopping and I prefer the name brand product, but buy the generic to save money, I will use a coupon and purchase the name brand.  For example, the price difference is 50 cents and the name brand gives a coupon for 35 cents, I will choose the name brand.  That confirms the findings of the study, as I would have been considered a “lapsed” buyer.

There are some items I simply will not buy generic replacements for.  Instead I will shop the ads and when there is a really good sale, I will pick up a couple of the same item, saving me money in the long run.  A good example of this is Heintz Ketchup.  I grew up on it, it’s the only kind I like, and yes it’s more expensive but I will not buy any other brand – it’s the taste and the consistency.  Now, if I get my hands on a coupon, it’s a happy day, and just like the others cited in the article, I will look for a coupon.  I am not loyal to Heintz per se, I will buy generic brand relish, mustard and other products that Heintz sells in order to save money, but I will not scrimp on my ketchup!  This sale would have been categorized as a “cannibalized” sale.

I really do not think Consumer behavior can be so easily categorized in those terms.  We live in interesting times right now.  Things have changed drastically with the steep recession we are in, and everyone is doing the best they can to get by.  What I find interesting was stores like Publix who would run their ad specials in conjunction with manufacturer’s coupons so if they were selling something 2/$4 this week, you could also use a manufacturer coupon to bring the price even lower.  I am sure that is why Publix is gaining market share and increasing revenues.

Digital Coupons vs. Newspaper Coupons:

Another article titled “Gens X/Y, Rich Households Hike Private-Label Sales, written May 6, 2010, affirms my shopping habits since the recession.  In this article it cites a Nielsen report that National brands still drive the vast majority of sales (82.7%) as well as units (78.1%).  During the period of time of the study, store brand sales grew by 2.5%, while National Brands were able to stabilize declines and achieve a growth of 0.4%, due to increased promotional spending.  The study showed that categories with the strongest brand marketing support (Beer, Candy) or those achieving the biggest innovations (deodorants, detergents) were the strongest of the national brand sales.

According to a Research Brief titled “Digital Coupon Redemption Value Beats Newspapers”, dated March 1, 2010, use of digital coupons outpaced newspaper coupons 10 to 1.

This study also cites a Nielsen Online Metrics report stating that coupons/rewards was the fifth fastest growing Internet category in 2008.  Google reported that searches for the terms “printable coupons” and “online printable coupons” grew 186% and 178% respectively during the year.  Yahoo reported searches for “coupons” were #1 on their list of economy-related search queries during the same period.  Futher, the 2009 Savings Index found that Atlanta residents were heavy users of Coupons.com offers in 2009, followed by Tampa, Cincinnati, St. Louis and Minneapolis.

Digital Coupons expected to continue growth in 2010:

In conclusion, I agree with Coupons.com CEO Steven Boal when he said “we expect the adoption of digital coupons will continue to accelerate in 2010”.  We are far from being “in the clear” with respect to this economic situation.  Smart manufacturers will continue to use digital coupons to invite consumers to save on their products.  Digital wins hands down – they are easy to locate, easy to print and while the coupons from yesterday’s newspaper are still sitting on your coffee table at home, the ditigal ones can be retrieved right before you leave work to purchase dinner on the way home!

Sources:

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=117207

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=127527

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=123365

http://promomagazine.com/incentives/news/0224-digital-coupons-beat-newspapers

Choosing a beverage can be a complicated decision.  In this economy, every decision is complicated!  You need to squeeze every benefit you can from every penny you spend.  This got me thinking about what is in my fridge to drink.  Really it was based on a comment that was made earlier in the week about not having enough milk on hand.  I countered the complaint with “milk is too expensive!”.

I am a firm believer that food = fuel, and that health care starts in my own kitchen and in what we put in our mouths.

Unfortunately, as firmly as I believe that, I am like everyone else who succumbs to packaged foods and fast meals, and I have for years.

Something got me thinking about that this morning.  I was trying to figure out WHY I was always giving in…and I realized that it was just EASY. Too easy, in fact.

Growing up as a kid, my parents worked every day and Saturday was our ‘chores day’.  We ate out occasionally – and by that I mean once or twice a month.  There was no McDonalds in my home town (circa 1960- 1973).  The only “fast food” were a few burger joints in the 15 mile radius that actually cooked REAL meat on a grill. Stopping at a place like that was a major treat – usually reserved for a summer night, after one of my little brother’s “away” baseball games.  Otherwise, we only went out for a “fancy” dinner on Easter Sunday.  I didn’t know how lucky I really had it back then.

That is what got me thinking this morning.  I have fallen prey to buying a couple 2-litre bottles of soda when I shop (usually amounting to 4 a week) as an alternate beverage to the standard glass of water in our house.  It seemed cheaper than, say, an extra gallon of milk.

Today, I decided  to really VERIFY that was true.  So, while making a speedy run to the store this morning, I first checked out the prices of other things I tend to buy for my family to drink other than the water I push continously with each meal.

The soda aisle:  my experiment today proves that this aisle can, single-handedly, rob us blind – both financially over time, and nutritionally.

What I discovered this morning at my favorite store was:

2 litre bottles of soda today were priced at $1.79 (brand named).

Milk was priced at $3.19 a gallon.

I don’t know about your family, but if I am going to buy soda, I want the name brand.  If I want Coke, then “cola” will not do. $1.79 for a 2-litre bottle seems like highway robbery to me for a bottle of water and sugar mixed with chemicals.

One 2-litre bottle of soda = approximately 2 quarts.

Thus, two 2-litre bottles of soda = a little over a gallon.

$1.79 per 2-litre of soda x 2 bottles = $3.58

I gallon of milk = $3.19

Value for my dollar:  Sugar and water with zero nutrients  vs. calcium and protien and lots of nutrients?    NO CONTEST!

From now on, if we crave a soda, we will have to go buy one from the $1 menu and enjoy it like fine champagne. My house will no longer include soda and my  family is getting milk, water, real fruit juice (I squeeze myself) or ice tea (I brew myself)  for their choice.  Yeah, it takes work on my part, but then so does scheduling dental and doctors visits and driving to them!

Hey Pete – YOU WIN!

Next up:  COMPLETE elimination of “packaged foods” from my house.  THIS should be interesting – and it seems a daunting task, so check back with me the next 6 successive Fridays!