Advertising & Marketing Blog

In a recent article on WSJ.com, which you can find by clicking here, Unilever unveiled a new program to test mobile coupons for several of their products sold through grocery stores. It’s interesting that the grocery stores want to try this out given how cumbersome this will likely be for cashiers and consumers alike.

Paper coupons are already a burden on grocery retailers. The benefit of them is that they are provided together in bulk to the cashier at check-out, who scans them through one after another. This takes time and eats up valuable wait-time in line for other customers.

However, think of a situation where you have these coupons on your cell phone and each coupon has to be scanned by the cashier, passed back to the consumer to click through to the next coupon, and repeat the cycle. It you have more than three product coupons (which most people do), I can see a situation where the people waiting in line behind you begin to riot and cause you physical pain once you complete the purchase and make your way to your car in the parking lot…

Mobile coupons are definitely the rage right now, but I think that the jury is still out on the best way to do this. Scanning mobile coupons one at a time doesn’t work. We’ll have to wait for a better way…

A very interesting article showing how as coupon usage is on the rise, the fraud associated with coupons is also on the rise. The interesting part of this article is that consumers are getting desperate enough to try new fraud techniques to “steal” from brands offering the coupons and the retailers.

Check out the article by clicking here…

A recent article by Promo Magazine discussed how grocery coupons for coupons.com have been on fire so far this year, with the number of coupons printed by consumers so far this year surpassing the entire number for 2008. Lots of focus has been devoted to internet coupons, coupon fraud, paper versus mobile coupons etc. The jury is still out on several topics, but one thing is certain. Consumers are looking to save more in every way and are going to the web to search for these savings increasingly over traditional sources such as newspapers. While newspaper circulars are still the lion’s share of grocery coupons, circulation declines and double digit growth in online coupons means that it’s only a matter of time before the web becomes the dominant source for coupons and other shopping incentives. For more on the Promo Magazine article, click here to check it out.

The NYT.com recently wrote an article about an interesting new bar code technology called GS1 DataBars that can help track information from products sold in grocery store chains, down to individual pieces of loose produce. The bar codes are pretty cool because they can be applied to individual pieces of fruit to capture variable weight pricing information, allowing grocery stores to keep better records of the produce people buy and streamline the check-out process. Even today, a lot of time is eaten up on line at the grocery store with manual data entry and weighing of individual pieces of produce. This bar code technology has unique information in two distinct mini-bar codes which capture pricing data about that piece of fruit and allows the price to be rung up as if scanning a box of cereal or other fixed-weight item. Pretty cool.

There are implications to this bar code technology for promotional use as well, especially with mobile phones, which are becoming the rave for mobile coupons at grocery stores.

I love this technology for the produce folks. Putting a unique barcode label on each piece of fruit is a daunting task but is the best idea I’ve seen in a long time to streamline the process at the register and stocking in the store. It puts a larger burden on the produce distributors but is a huge leap forward in supply-chain management for groceries, which has always managed produce in an ad-hoc way.

I’m not sure if this technology will fit perfectly with Mobile phones, given the existing issues around scanning bar codes off mobile phones, as well as the issues with linear bar codes on mobile phone, which tend to get mashed up and re-sized on different mobile phone screens. We’ll just have to wait and see.

In a recent article by eMarketer, found here, there is discussion that the pharmaceutical industry is moving away from consumer marketing and advertising, otherwise known as direct-to-consumer (DTC) advertising. This is the type of advertising for specific drugs that you probably get annoyed by on TV or in magazines.

The change is caused by smaller budgets and a larger focus on direct-to-patient advertising. Some basic testing must have proven that marketing to patients produced a higher ROI than the generic, mass-marketing approach taken through traditional TV and other advertising.

I think that digital media could save DTC advertising for pharmaceuticals because it provides more cost-effective reach to consumers. Adding promotional tactics to digital marketing on the web to drive drug sales offline could be a very large potential opportunity and could replace other forms of traditional media that can’t be measured.

I’ve been following the adoption of mobile coupons by retailers very closely. I’m not that surprised to see that a handful of supermarkets are leading the pack with testing various mobile coupon offerings. In a recent article on marketingvox, found here, it highlights some of the ways that supermarkets are able to embrace digital coupons without technology upgrades or the expensive and administrative burdens of paper coupons.

There is a lot of activity in the mobile coupon space within the supermarket industry. Several consumer brands are jumping in to test out if mobile coupons deliver the convenience, functionality (to consumers) and cost savings (to the brand) over traditional coupons.

There has been quite a bit of debate around scanning bar codes off mobile phones for specific product offers. First, not all grocery stores can scan a mobile bar code. In fact, the latest figure was somewhere around 10% of retailers can scan a mobile phone. That’s the first hurdle. Second, industry folks are arguing that scanning individual coupons off the mobile phone might prove even more cumbersome than scanning paper coupons given the fact that consumers need to scroll through the different offers on their phone and hand it back and forth to the cashier, eating up precious time in line for other customers (a big no no for retailers). The wait time in line is a major deterrent for scanning individual coupons off a phone, especially at grocery.

There are several competing technologies that involve mobile phones, one where the phones are scanned for each coupon and another where the phones are simply used to activate coupons that are then linked to your frequent shopper card, which will activate the coupons all at once at the time your frequent shopper card is scanned at check-out. This is a much more involved but provides convenience and efficiency for the customer and retailer. I will continue to blog about and monitor the evolution of mobile coupons in the grocery industry. It is a very fast-growing industry and represents substantial opportunity for innovation for start-ups.

A friend of mine was recently written up in the NYT business section for some of the interesting work he’s doing on applying “wall-street” analytics to digital advertising. Darren Herman, president of Varick Media Management, is looking at advertising on the web much like financial traders look at investing money in untapped opportunities. It’s definitely a different way of looking at advertising. With all the data and analytics available from the web, agencies and technology companies have tremendous opportunity to use predictive modeling and algorithms to predict the success of various campaigns prior to launch and invest money in certain campaigns accordingly to maximize the return on that investment. In many ways, it’s no different than researching a specific stock to buy and then buying it and measuring it’s performance. If you do enough research and execute enough trades (i.e. media campaigns), you’ll hedge your bets and likely end up with some real winners and a solid return. Congrats Darren on the great press and keep up the innovation!

I was recently sent a very interesting article on Internet Retailer showcasing how Performics, a top-rated search agency, executed a successful campaign for Cabela’s sporting goods. They ran an in-store coupon online with google search marketing and tracked the overall impact on in-store sales. The result was phenomenal, albeit without key-word level tracking to know which key words worked best. Even without optimization, the campaign was a success and it looks like one of the few good case studies outlining how search marketing can influence in-store sales in a major way. Check out the full article here.

“There was a 140% growth rate in online coupon use over 2007’s previous high.” -eMarketer, March 12, 2009

Coupon sites are the second most popular site (at 25% to 37%) after search engines among types of shopping sites users found very important in the past three months. -comScore “State of the US Online Retail Economy” Feb 19, 2009

· Forty million people currently print online coupons, up 20% from last year, according to Simmons Market Research Bureau
· ComScore reports there were 19.9 million searches for the word “coupon” in December 2008, up 161% over December 2007
· Sixteen percent of consumers will not make a purchase if they can’t find a coupon, according to a survey conducted by Harris Interactive for RetailMeNot.com

Each of these data points lead us to the same conclusions:
1) Advertisers need to embrace internet marketing as a way to distribute promotions to consumers.
2) Brands need to embrace promotional tactics, especially on the web, in order to compete in today’s economy for sparse consumer dollars.
3) Digital media is the future of advertising and brands need a digital strategy that will reach consumers with a targeted and secure promotional strategy to drive offline purchasing behavior.

I was recently in Toronto for a search marketing conference at SMX Search Analytics and had the opportunity to sit on a panel with several search marketing experts. The conversation was very interesting and focused around how you maximize the effectiveness of paid search. One panelist suggested a great idea that had to do with excluding geographies in your paid search efforts that include the locations of your competitors. I loved this idea that you could be stealth and run your campaign in a way that your competitors would not see your ad on Google, and hence would not know how/if you’re actively competing with them. There are several limitations to this approach but the idea was brilliant.

The conference was summarized on the Search Engine Land blog, which can be found here. It’s got some great snippets of the conference, including a very honorable mention of RevTrax and how we’re trying to stir the pot of paid search marketing for in-store sales. Enjoy!