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Mobile coupons have not reached mass market yet: Forrester

March 18, 2010

Target mobile coupons from Kraft and Planters

Target mobile coupons from Kraft and Planters

Consumers and advertisers are curious about mobile coupons, but their challenges and limited consumer usage mean they do not need to be an immediate priority, according to Forrester Research.

Advertisers should not feel the pressure to launch a nationwide mobile coupon effort in 2010, but they should be laying the groundwork today for a service that will integrate with existing loyalty programs. Forrester’s mobile POST analysis offers tips to help determine which approach to mobile couponing is right for each brand.

“The bad economy, consumer interest in promotions, higher adoption rates and usage of mobile data services and the ability to reach younger demographics are driving adoption of mobile coupons,” said Julie Ask, San Francisco-based vice president and principal analyst at Forrester Research.

“Mobile coupons have advantages over traditional paper coupons—mobile couponing could potentially cost less, it enables real-time distribution and brands can add location-targeting,” she said.

Forrester Research is an independent technology and market research company that provides its clients with advice about technology’s impact on business and consumers.

Plan and pilot—do not panic
Advertisers of consumer products and services should not feel the pressure or urgency of a 2010 nationwide launch given that just a small proportion of consumers are currently engaging with mobile promotions, according to Forrester.

But companies should be laying the groundwork—including pilots—for a longer-term vision that uses coupons to engage customers.

To get started with mobile coupons, Forrester has several recommendations:

Focus on delivering convenient experiences
Delivering convenience to consumers is job No. 1—without consumer adoption and the ensuing scale, the economics will not work.

Most consumers either use paper coupons clipped from the newspaper or those received in the mail or via email.

Julie Ask is vice president and principal analyst at Forrester Research

Julie Ask is vice president and principal analyst at Forrester Research

Switching to a new medium means that you must offer consumers a more convenient experience.

For advertisers, this means more convenient discovery, collection, storage and redemption of coupons.

Mobile coupon wallets tied to loyalty cards and point-of-sale systems allow for more convenient storage and redemption.

Leverage the digital nature of the coupons
Managing expiration dates offers a more specific example. Retailers know the coupon’s value and expiration point.

Some retailers will honor expired coupons, but not all retailers will—especially manufacturer coupons where the manufacturer is motivated by trials and not by a larger basket size.

One opportunity for marketers is to leverage the information on coupons to send alerts to “use them or lose them,” for example.

Design and execute campaigns as if they were already an important part of your mix
With low consumer adoption and usage, advertisers may be unwilling to spend on the creative, marketing or analytics needed for effective campaigns.

Consumers expect relevancy, creativity, and value even more on mobile phones than in other mediums. They expect the experience to be more personal.

Acknowledge that some customers are mobile-only and not multichannel
Multichannel is a major theme for many companies in 2010—it is for Forrester as well.

Advertisers will need to balance their desire to shrink newspaper inserts to small screens to ensure a consistent experience across all channels while recognizing the reality that some consumers—especially younger, new customers—may be mobile-only.

The mobile-only audience may require different promotions to encourage the behavior that merchants seek.

Avoid one-off campaigns
Solutions should integrate with existing loyalty programs, promotions, POS systems and mobile services.

Discounts tied to a single loyalty card or phone number allow for the quick redemption of all coupons.

Retailers should take the opportunity to integrate with other services—such as consumer reviews, shopping lists and recipes—to drive engagement with customers.

Use Forrester’s mobile POST methodology
Brands can work through the mobile POST methodology with the goal of developing a baseline tactical plan that includes proposed reach, offering, distribution plan—such as their own application distributed through the Apple App Store—and budget.

While initial pilots may be simple, brands will want to start developing a road map toward more sophisticated targeting—based on behavior in particular.

While mobile coupons may not have achieved mass-market adoption yet, it is only a matter of time before they do, and brands must be ready by getting into the space now.

“Some barriers to mass-market adoption of mobile coupons include limited consumer awareness and usage and limited overlap between those who are heavy users of coupons and those who are heavy users of mobile coupons,” Ms. Ask said.

“The current state of mobile coupons is nascent, but growing,” she said. “There is a lot of optimism given the level of investment and spending in mobile couponing programs today.”

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Dan Butcher is associate editor on Mobile Commerce Daily and Mobile Marketer. Reach him at

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