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Ibotta’s cash back program offers change from limits of coupons

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May 12, 2015

Ibotta app.

Ibotta app.

Ibotta’s expanding cash back program suggests that while coupons have grabbed a prominent spot in mobile shoppers’ hearts, consumers are also gravitating to the opportunity to earn up to hundreds of dollars a year without letting coupons dictate what brands they buy.

Shoppers simply download the free Ibotta app onto their phone, or visit the Ibotta.com Web site, browse their favorite products, unlock cash rebates, go shopping, and verify their purchases. The app’s expansion suggests that as more consumers move into mobile, cash back programs may resonate may strongly with them, even as coupons become a mobile commerce staple.

“Ibotta understands that in order to continue to gain market share they need to provide the best user experience possible,” said Shuli Lowy, marketing director for mobile with Ping Mobile. “The Any Brand program provides one less limitation for consumers to cash in on their rewards.

“While it may seem on the surface that Ibotta is a distributor of manufacturers’ coupons, Ibotta actually uses a very different model to earn its revenue,” she said.

“Ibotta’s model fuses couponing with incentivized marketing. It drives its growth by offering consumers a commission on the revenue they drive,” she said.

Any Brand
Ibotta’s Any Brand program lets shoppers earn cash rewards whenever they purchase staple items on their shopping list, regardless of which brand they buy.

It will deliver cash back for routine purchases in many popular supermarket categories, including dairy, fresh produce, breads and grains.

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Ibotta on Apple App Store.

Ibotta pioneered the Any Brand concept a year ago after realizing that more than 70 percent of its users regularly bought milk. The Any Brand milk program resonated with consumers, which led Ibotta to expand the program’s scope.  

Through Any Brand, consumers can earn up to hundreds of dollars a year without letting coupons dictate what brands they buy.

Since launching in 2012, Ibotta has delivered over $25 million in cash rebates to shoppers. The company’s easy-to-use app provides consumers with flexible ways to unlock cash back rewards as they shop by completing simple tasks. It is ideal for shoppers who want great savings, but are not interested in the hassle of couponing.

Over the past three years, Ibotta has expanded to support over 150,000 stores nationwide including Walmart, Kroger, Target, Safeway, Costco, Whole Foods, Food Lion, Publix, Rite Aid, Giant Eagle, Raley’s, and more.

In addition to grocery, Ibotta also provides consumers with cash back in other popular categories, such as electronics, apparel, and beer, wine, and spirits among others. To date, rebates have been viewed on Ibotta over 6 billion times, and 150 million unique brand interactions have been completed.

Ibotta’s impact shines attention on whether cash back programs are destined to become more popular than coupon programs as customers increasingly embrace mobile.

At the same time, Ibotta’s success comes amid critics’ claims that the vast majority of rebate programs have failed to evolve since their inception. That deficiency seems especially glaring as more customers move over to mobile with its immediate communication and gratification. 

Traditionally, consumers fill out a form, mail in their submissions, hear nothing for six weeks and, if validated, get a check in the post.

Last week, David Hargreaves, the San Francisco-based chief client officer of Snipp Interactive, wrote in a Mobile Marketer column that mail-in rebates need to adapt to today’s technology by letting the consumer upload content online or send it in via email or text message instead of being required to fill out a paper form and mail in a proof of purchase, receipt or UPC code.

Programs also should immediately send a text or email confirming that the rebate submission and validation, he argued. Further, customers should be able to check the status of their rebate at any time. Keeping the customer in loop should be a program priority.

Programs also should cater to consumer preferences by offering modern rewards such as direct deposit, prepaid debit or gift cards and giving consumers a choice in their reward.

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Personalizing rebates.

By using digital receipt validation, program operators can learn much more about consumer purchasing patterns including purchase location, retailer preferences and demographic details, thereby better deploying assets and catering to consumer needs.

Becoming commonplace
Brands at times will pay publishers a certain amount per action that they drive. That action could be watching a video, downloading an app, or subscribing to an email/SMS club. In incentivized marketing, consumers choose to complete an branded action to unlock something. The ad format is becoming more commonplace – particularly within mobile games which often allow users to choose to complete an action to get to the next level or unlock an extra feature.

Ibotta is likely earning a fee per action that consumers complete and is passing along a portion of that revenue to consumers. For consumers, the experience is rewarding because they see an immediate return. The model is similar to that used by Swagbucks.

“Actions performed through incentivized marketing are generally considered of lower quality as they are not fueled by genuine interest in completing the action,” Ms. Lowy said. “Consumers complete the action because they are interested in the feature that action will unlock.

“Nevertheless, incentivized ads are dramatically cheaper and can therefore still be cost beneficial at times,” she said. “Marketers purchasing incentivized ad traffic must build an LTV model through which they evaluate the cost benefit analysis of buying cheaper, lower quality ad spots versus more expensive, better quality ones.”

Final Take
Michael Barris is staff reporter on Mobile Commerce Daily, New York

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