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Table of Contents
˺˺ Digital Coupon Landscape p3 ˺˺ Foreword p4 ˺˺ Acknowledgements p5

Articles
˺˺ Digital Coupons Overview: Ten reasons digital coupons matter right now p6 ˺˺ The digital coupon target p9 ˺˺ Evaluating digital coupons for your brand p11 ˺˺ Digital Incentives: A clarification between coupons & offers p13 ˺˺ The Basics of Digital Couponing p14 ˺˺ The differences between digital & traditional coupons p15 ˺˺ Considerations for using digital coupons p17 ˺˺ Digital Coupons: A strategy or a tactic? p20 ˺˺ Digital Coupon Delivery p21 ˺˺ Couponing Innovations p23 ˺˺ Measuring Success p32 ˺˺ Conclusion p33

Contributor Articles
˺˺ Spotlight On: Kraft Foods p10 an interview with Joan Francolini - Sr. Director, Brand and Customer Engagement and Ed Kaczmarek - Director of Innovation, Consumer Experiences ˺˺ Spotlight On: Coupons.com p18 an interview with Steven Boal, CEO ˺˺ Spotlight On: MyWebGrocer p30 an interview with Gregg Vincent, VP of Consumer Products
blog.360i.com / @360i

02

Digital Coupon Landscape

03

Couponing in the Digital Age: A Playbook for CPG Brands Digital Coupon Landscape

blog.360i.com / @360i

as opposed to via the traditional Sunday newspaper. Digital coupons are more flexible. and more. They offer improved personalization. This generation of digital natives will not spend their time clipping coupons in the kitchen. This playbook focuses on the most prevalent digital coupon and incentive programs available for packaged goods marketers. efficient and more effective at enticing new buyers. greater convenience.Foreword F rom the recession has emerged a new budgetconscious America that is driving a marked shift in consumer behavior around coupons. the benefits of digital coupons are many. with the goal of creating a comprehensive guide to the various opportunities. — June 2011 04 Couponing in the Digital Age: A Playbook for CPG Brands Foreword blog. opportunities for socialization. They also appeal to a more attractive demographic (Millennials and other digital natives). Today. digital coupons present tremendous opportunities for marketers with a vision. In the pages that follow. we present an overview of the landscape in addition to tips for maximizing marketing objectives through the use of digital coupons. Given the pace of change in media and the mobile landscape in particular. protection against fraud. Beyond this. digital coupons represent a growing portion of the overall coupon market. They will instead explore new ways to engage with coupons digitally. which for decades has been the main distribution outlet for traditional coupons.360i. A new generation of digital-minded consumers prefers to read news online and via mobile devices.com / @360i .

We’d like to take this opportunity to thank them for their contributions. And advanced thanks to the readers who are moved to comment. scan. Thanks also to the 360i team who wrote. Cellfire and SocialTwist for their valuable input. Gerardo Calixto. Joan Francolini. R.360i. To our featured columnists: Steven Boal.360i. Amanda Bird. via feedback on our blog at blog. Irina Kondrashova. Logan. designed and managed this report: Andy Amendola. Ed Kaczmarek and Gregg Vincent – thank you all for sharing your keen insights with us and our readers. Dave Jacobs. blog or generally discuss the contents herein. David Berkowitz.com / @360i . Sarah Hofstetter.G. edited. critique. share.Acknowledgements S everal individuals graciously lent their time and talents to the production of this report. We would also like to recognize Coupons.com. Share this playbook on: 05 Couponing in the Digital Age: A Playbook for CPG Brands Acknowledgements blog. tweet. SmartSource. Kelly Dudine. Lee Maicon and Katie Perry.com.com or on Twitter @360i. We encourage you to reach out and share your thoughts directly with us any time at editor@360i.

they are seen as a savvy shopper. The New Normal means couponing is here to stay.com / @360i . 96. Couponing and saving have cultural cachet. As the Sunday newspaper distribution declines at a faster and faster rate. Digital empowers these types of consumers.8m 44% 47% 2011 48% 2012 49% 2013 By 2013. meaning less access to newspaper circulars or free standing inserts (FSIs). giving them the tools to find the very best deals available. " 1. wanting to influence shoppers throughout their path to purchase. FSIs represented over 87% of total coupon distribution. the coupons you find in your Sunday newspaper. 06 Couponing in the Digital Age: A Playbook for CPG Brands Digital Coupon Overview: Ten reasons digital coupons matter right now blog. Because of the length of the recession and slow recovery.com 2. many people will not abandon their newly adopted frugality and continue to use money-saving techniques like coupons. brand marketers are increasingly engaging with consumers via digital offers.5m AdULt ONLINE cOUpON UsERs (MILLIONS) 96. 2009-2013 77. In 2010. At the same time. CEO of Coupons.360i. The person holding up the line with his or her coupons is no longer frowned upon or pitied because of tough times. May 2011.4m 46% 2009 2010 83. FSIs are distributed by two key players in the traditional coupon industry – News Corporation’s SmartSource (News America) and Valassis.2m 92. Newspaper readership is declining. in social media. accessing them across the entire digital domain . via their mobile phones.” –Steven Boal. 3. Source: eMarketer.including the web. instead. with consumer electronics. etcetera. Saving is becoming an expected behavior among Americans. It’s becoming part of their daily routine.6m % OF INtERNEt UsERs 88.Digital Coupon Overview: Ten reasons digital coupons matter right now US Adult Online Coupon Users. More and more consumers are making digital coupons a part of their shopping routine. digital coupons will become an increasingly effective way to supplement traditional coupons (Source: Valassis).8 million adults will redeem an online coupon.

As such. Brands can also benefit from the shorter lead times that digital coupons offer. Retailers are using digital coupons to drive consumers to their websites. approximately 13 hours per week.com / @360i . they will naturally seek out more deals and coupons while online. as people have their mobile phones on them all of the time. among other benefits (Source: Advertising Age. Smartphone penetration is increasing. They are also more educated. the opportunities for mobile couponing and shopper marketing will only increase. November 2010). A Forrester research report from December 2010 found that for the first time ever. 6. Digital coupon printers are 17% more likely to have college or advanced degrees than the general population. Evolution of consumer behavior has changed this. digital coupon redemptions are expected to grow 25% this year. 5. Consumers who are using digital coupons represent a desirable group. digital coupon users are younger and more likely to live in households with more children (Source: Simmons Market Research Bureau). The popularity of daily deal sites such as Groupon and the myriad copycats is further evidence of this trend. The Zero Moment of Truth shows how consumer behavior is changing. Mobile means access anytime. Digital coupons are more efficient and have higher redemption rates. but digital coupons are growing faster. the average American spends as much time surfing the web as he or she does surfing channels on TV. Instead of buying the mass reach of traditional FSIs.4. 9.360i. 8. Online search and social media now have people coming into store prepared and with intent to 07 Couponing in the Digital Age: A Playbook for CPG Brands Digital Coupon Overview: Ten reasons digital coupons matter right now blog. As consumers spend more time online. Digital coupons are attracting a different audience than traditional coupons. As more and more consumers adopt and become comfortable with smartphones. as well as getting around any exclusivity restrictions. anywhere. brands can tailor their approach with the pay-for-performance model used by digital coupon suppliers. Traditional coupons may still hold the lion’s share of the market. The digital coupons industry is growing fast. Additionally. It was was widely believed that the “first moment of truth” – the phrase coined by Procter & Gamble for the three to seven second window when shoppers evaluate a product on a store shelf – was the key decision making point for a consumer on the path to purchase. 7. Greater smartphone adoption paired with constant technological innovation is critical to the growth of digital coupons and shopper marketing as a whole. Digital coupon printers are 35% more likely to have a household income of $75K+ compared to the general population. Mobile is a great platform to reach and interact with consumers in or near the purchase phase of the shopping cycle via location-based programs. The Internet has become a key part of everyone’s daily lives. Brands can be much more targeted with digital coupons. digital coupons have redemption rates that are nearly 20x higher than FSIs and significantly higher rates than direct mail and electronically-dispensed coupons. According to 2010 research from Kantar Media.

but whoever can make digital coupons more seamless and easy to use for consumers will benefit vastly. " While the first moment of  truth is still important.IN-StORE BEFORE ENTERING 40% 60% 25% 75% 17% 83% 17% 83% 2007 2008 2009 2010 A study from Symphony IRI Group found that more than 80% of shoppers make their purchase decisions before ever entering the store.com / @360i . You can get ahead of this emerging and enduring shift in consumer behavior. 10. The day of the Sunday paper is fading. purchase particular products based on what they have learned online.360i.” –Google CPG Blog 08 Couponing in the Digital Age: A Playbook for CPG Brands Digital Coupon Overview: Ten reasons digital coupons matter right now blog. Given this shift. but there is a new generation of consumers that still wants to save. Right now digital couponing has yet to become a fully mainstream behavior. the rise of full Internet adoption and increased search engine use often lead to many brand interactions taking place between a consumer and a brand before that consumer ever sees a product on a shelf. Google has coined a new term: the “Zero Moment of Truth.” or ZMOT.

visit parks and attend various cultural events. 34% male Average Age: 46 Marital Status: 61% married Average HHI: $72K Employment: 70% employed full/part-time Education: grad/post grad 166 index TEcHnoLoGy and mEdia pRofiLE Online and Social Coupon Carla is highly engaged online. new entertainment news and movie releases. posting photos and commenting on blogs. she spends it on fun experiences with her friends and family. Right now. When she saves money on buying products. Consumers who download online coupons tend to be married women in their mid-30s to late 40s who are more likely to be college educated. interacting with user-generated videos. forums and social networks. local happenings. They are also wellversed in navigating necessary search tools. fresh produce keeps her diet going! A Socialite Coupon Carla loves to entertain informally at home. these consumers tend to be offline coupon clippers as well.6% of all online audiences. T he Insights & Planning team at 360i recently analyzed the persona of a typical digital coupon user. informed by Nielsen @Plan. sharing links and information. They are task-oriented users of the Internet. recipes and fun tid-bits to keep her household running smoothly.” 09 Couponing in the Digital Age: A Playbook for CPG Brands The digital coupon target blog. Aside from a generic “coupons” keyword search.The digital coupon target 360i Persona: "Coupon Carla" Gender: 66% female. The market size this audience was found to be 19. and feels good about shopping for green products. blogs and forums to retrieve relevant information. plus.360i.com / @360i . coupons let them try new products and provide a thrill for the bargain hunters among them. Beyond saving money. the most prevalent coupon searches are “printable coupons” and “online coupon codes. Staying Informed Coupon Carla uses the Internet as a means to gather data . OffLinE PRofiLE Green Lifestyle She is more enviromentally aware. Couponers are highly social and tend to be creators. always in the know among her social networks.to keep her organized and informed about best deals. looking for specific information and using the web as a means to stay organized. Tending to her vegetable garden is one of her favorite leisure activities.

or as a targeted program. Personalization and ubercustomization based on purchase data will exponentially increase relevance and enable manufacturers to more efficiently leverage mobile to maximize sales and loyalty. we’d like explore how to reduce the costs of direct-to-card backend processing and eliminate the option of “stacking” with direct to card.e. Moving forward.com / @360i . 10 Couponing in the Digital Age: A Playbook for CPG Brands Spotlight On: Kraft Foods blog. What are the greatest opportunities that digital coupons hold for Kraft? And what is holding back digital coupons from being used more by marketers? The most powerful benefits of digital coupons are the ability to 1) target consumer offers based on their purchase habits. How do digital coupons work with or alongside traditional coupons? Depending on the brand. What does the future of digital couponing look like? What are some predictions you have for the coming years? Expect to see more direct-to-card opportunities via mobile. We are using them to drive purchases. though Kraft Foods has not found this to be an issue. as an add-on to an FSI. We believe that mobile couponing will eventually reach critical mass as redemption integration becomes more prevalent across grocery and mass-merchandise stores. as many coupon users are checking multiple areas for coupons. We try not to duplicate offers online and in print. We’re also exploring how to link the use of digital coupons to increased in-store support. Consumer Experiences What’s one example of how Kraft is using digital coupons today? Kraft is using digital coupons via digital FSIs and retailer programs.360i. as well as redemption via scanning directly from a mobile device. copying coupons) and the increased liability that goes along with it. as a replacement for an FSI.Director of Innovation.Spotlight On: Kraft Foods an interview with Joan Francolini . reach new audiences and tap into the growth of coupons offered digitally. digital coupons can be used as a quick hit way to distribute coupons. and 2) execute a quick-to-market coupon strategy at a lower non-working cost. Director. It’s likely that some marketers are concerned about fraud (i.Sr. Brand and Customer Engagement Ed Kaczmarek .

knowing your target’s comfort level regarding various digital platforms and devices will help you achieve success. they should be rewarded in like value. to launch Cooking Crème. 11 Couponing in the Digital Age: A Playbook for CPG Brands Evaluating digital coupons for your brand blog. Philadelphia Cream Cheese offered coupons to the existing Paula Deen Real Women of Philadelphia community. Providing more context to a digital coupon campaign will attract more of your consumers in addition to those just seeking coupons. Mobile coupons.360i. Does it follow the rules of the road? Understanding which digital platforms are most used by your target audience will help determine where and how to serve them with digital coupons. and how to use digital coupons for your brand. Consider the campaign elements or brand arsenal that you have to work with and incorporate digital coupons to help consumers along the decision making process. You can use this lens as a way to target your evaluation when it comes to what’s best for your brand’s needs. Because some types of digital coupons are not yet mainstream. Does it leverage your arsenal? Digital coupons offer a great way to connect digital campaigns to in-store trial and purchase. for example. In fact. Executions like progressive coupons and tell-a-friend coupons mean that as consumers work to spread your coupons and brand message they should be rewarded in turn. For example. Does it provide a value exchange? When asking your consumers to take action. the value you assign to your coupons will be of equal or greater value to the actions necessary to redeem them. the Strategic Lens that was described in 360i’s Social Marketing and Mobile Marketing Playbooks can still be applied to digital coupons. when.com / @360i . you can apply the same strategic analysis you would for larger digital programs. skew more towards early adopters of technology and may not be appropriate for a less digitally savvy group.Evaluating digital coupons for your brand When considering if. Ideally.

12 Couponing in the Digital Age: A Playbook for CPG Brands Evaluating digital coupons for your brand blog. but if you want to launch a new product and need more reach. a digital FSI may be more appropriate. a progressive coupon may be a great way to build fans on a social community. Brands should consider their coupon budget and what they hope to achieve with digital coupons before assigning a value. If the budget is small and they hope to reach more people. Also. Setting clear objectives will inform your decision-making when it comes to determining which coupon delivery system to use. Does it meet your objectives? Knowing what you hope to accomplish with your digital coupon campaign is a very important step. If the product is unknown.com / @360i . For example.There is no single “right” value that all brands can offer. The discount value should vary by brand. We recommend testing a variety of different values of coupons to see which offer works best.360i. a larger value may be necessary to motivate purchase. then assigning a lesser value might be a better strategy. Such comprehensive testing is something that is only possible with digital coupons. and be influenced by a variety of factors. setting clear objectives will allow you to determine the success metrics you will ultimately use to analyze your program.

Digital Couponing 101: E-Commerce Coupon Codes With the growth of e-Commerce has come the growth of searching for coupon codes prior to making purchases online. This report focuses exclusively on CPG coupons.360i.com / @360i . Some of the better-known sites for this type of coupon are RetailMeNot. Offers differ from coupons used by manufacturers to provide discounts for their products. Typically discounts appear on these sites without the brand's knowledge or permission.com and DealTaker. and the like. restaurants. local retail. or to limit your coupons to your target consumers.Digital Incentives: A clarification between coupons & offers There is a wide variety of ways to incentivize purchases online. if a brand is looking to maximize reach for their offer. 13 Couponing in the Digital Age: A Playbook for CPG Brands Digital Incentives: A clarification between coupons & offers blog. Much of the recent growth in online shopping is fueled by “offers.com.” which are discounts for service. they could allow coupons or codes to be distributed on these types of sites. To prevent over-redemption. However. brands are not advised to pursue opportunities with these types of sites. For example consumers will search for “Orbitz Coupon Codes” prior to booking travel with the hope of attaining a promotional code that will save them money upon checkout.

Also. Retailers make money by quickly checking out customers and as such. a digital coupon can be placed almost anywhere. According to a prominent digital coupon supplier. To be redeemed at a cash register. grocery stores and other venues where consumer goods are sold can only accept coupons in two primary ways due to their technological restrictions.360i. whereas those for loyalty card coupons are around 10%. Higher redemption rates for printed coupons occur because consumers are more likely to remember to purchase products for which they have coupons in hand. which aggregate your loyalty cards onto your phone so you can just present your phone at checkout. the technology used in Target stores has not been adopted by any other large retail chains. At present. redemption rates for printed coupons are about 15%. there are some apps such as CardStar. digital coupons must either be printed by the consumer or loaded virtually onto a supermarket loyalty card. as oppose to having to remember what they loaded onto their loyalty cards at an earlier time. supermarkets.The Basics of Digital Couponing G iven the flexibility of the digital medium. 14 Couponing in the Digital Age: A Playbook for CPG Brands The Basics of Digital Couponing blog. which has the technology to scan barcodes on consumers’ mobile phones.com / @360i . anything that slows that process down is not welcome. added to any campaign and delivered to people in a number of ways. Unfortunately. However. An exception to these two main delivery methods is provided by the retailer Target. these don’t always work well at the register.

Once a coupon is online.com / @360i . % Redemption Value < 40% 40% .The differences between digital & traditional coupons For consumers. 59.49.59.69.9% % Analyzed Traditional FSI Digital FSI ˺˺ Higher redemption rates: The fact 7% 11% 14% 25% 25% 18% 0% 0% 6% 12% 35% 47% that coupons are either targeted to consumers or sought out by them has lead to improved redemption rates.9% 49. We list some of the advantages of using digital coupons below.9 . The consumer is taking the time to print out coupons so he or she is more likely to use them. N = 17 Digital and 28 Traditional recently analyzed FSIs in similar categories: 4 Edible Grocery and 1 Non-Food Category 15 Couponing in the Digital Age: A Playbook for CPG Brands The differences between digital & traditional coupons blog.9 .79. Data Period: CY 2008 and CY 2009. it is easy for Internet users to search and find it – and they no longer have to pay and wait for Sunday newspapers find coupons.9% 69.9 . 82% of analyzed Digital FSI events achieve 60% or greater incremental redemptions compared to 68% for Traditional FSIs. traditional at 63%).9% > 80% Source: Knowledge Networks Normative Database.360i. Digital FSIs drive 24% more incremental redemptions than traditional FSIs (digital at 78% vs. one of the key differentiators between digital and traditional coupons is convenience.

The former is a print-at-home type coupon which can be redeemed by the consumer at any grocery store selling that item. When the manufacturer chooses the latter. A digital coupon campaign. coupon offers may become exhausted earlier. to consumers. When this happens. Customer coupons are generally delivered directly to loyalty cards via the retailers’ websites or some mobile applications. as it is more beneficial to both brand and consumer that consumers be able to maximize redemption opportunities. ˺˺ Timing: Digital coupons can run continuously and can be created with relative ease compared to traditional coupons. while traditional campaigns typically take up to eight weeks to begin.˺˺ Sharability: Digital coupons can be easily shared and spread around by consumers. ˺˺ Metrics: Digital coupons can offer better tracking opportunities for brands as they can receive information on consumers printing digital coupons right from the beginning of the campaign launch. Traditional redemption data takes approximately eight weeks to gather. can be live within 72 hours. 2011).360i. they can choose to have their coupons served as generally accepted coupons or as customer coupons. Also. 16 Couponing in the Digital Age: A Playbook for CPG Brands The differences between digital & traditional coupons blog. when working with a digital coupon supplier or aggregator.com / @360i . brands can set a print limit per IP address so consumers can only print a single coupon. the user can only use that coupon at the specified retailer chain. ˺˺ Lower costs: Digital coupons pass the cost of printing When a manufacturer decides to launch a digital coupon campaign via a digital coupon supplier. Most coupons fall into the “generally accepted” category. ˺˺ New buyers: A new report shows that digital coupons accepted manufacturer coupons and customer coupons are 35% better at attracting previous non-buyers and attracting more new buyers than print coupons (Source: Knowledge Works Trend Report. ˺˺ Capture demand: Marketers can use digital Digital Couponing 101: The difference between generally coupons to attract consumers who are searching for a particular product or brand.

˺˺ Application download: Some coupon programs require users to download an application in order to access the offer. In April 2011. extreme coupon users. Marketer considerations to note when pursuing digital coupon programs include: ˺˺ Reach: Traditional coupons still reach more people. and this additional step may cause some users to drop off prior to redemption. digital users said their housecouponers tend to be more hold also used print coupons. Experian Simons coupons. ˺˺ “Doubling down”: Keeping track of each of your even among Internet users. ˺˺ Printing: Printing coupons adds a level of complexity for consumers. Moreover.Considerations for using digital coupons The consumer experience for digital coupons is constantly evolving – and. as advanced as digital coupons may seem. Although newspaper FSIs may drive volume. Most suppliers will allow two chances to print per user because of the difficulty associated with printing the coupon correctly the first time. Digital coupon users also used them for a wider variety of purchases and at a greater variety of stores than those who used only print coupons.” –John Fetto. compared with 35% of print ˺˺ Paid media support: Sometimes additional paid media support will be necessary to achieve campaign print goals. who likely only have one or two chances to print out the coupon before losing out on the offer. if not heavily discounted. 17 Couponing in the Digital Age: A Playbook for CPG Brands Considerations for using digital coupons blog.com / @360i . ˺˺ Audience: The traditional coupon clipping target brand’s coupon offers is very important as savvy consumers will “double down” on deals by using digital coupons with traditional coupons and match them with in-store sales to potentially get products for free. digital coupons minimize waste. Experian Simmons’ John Fetto told MediaPost that people who use coupons are more likely to use all kinds of 99% of digital coupon coupons. " couponers using digital coupons. there are still some barriers to mainstream adoption. ˺˺ In-store experience: Not all retailers accept printed may not be the same as the digital coupon audience.360i.

have higher household incomes. they are younger. It’s not just about giving a coupon 18 Couponing in the Digital Age: A Playbook for CPG Brands Spotlight On: Coupons. digital coupon users hail from a very attractive demographic. targeted outreach – while still delivering scale and reach – at multiple touch points in the decision process. have larger households. What are the challenges to working with digital coupons and how can marketers overcome them? Marketers are challenged to keep pace with the rapid change and growth that is happening in digital. The primary point of differentiation for digital coupons is their effectiveness in enabling brand marketers to be more personalized and targeted in reaching an emerging consumer segment along the entire path to purchase. are better educated. shop more frequently and spend more each month on groceries than users of traditional newspaper coupons. communication is mass and anonymous. Beyond naturally increasing digital habits.com / @360i . What’s more.360i. We’re working with coupon issuers to address the challenge of “keeping up” by our getting involved in the marketer’s planning process and helping them plan their annual budgets based on what we see in the transition to digital.com an interview with Steven Boal. what are some ways brands can help consumers become more comfortable with digital coupons? Brands can increase consumer friendliness with digital coupons by integrating them across their multichannel marketing program. New channels are emerging and the existing ones are growing exponentially. whereas digital enables a more personal.Spotlight On: Coupons. With traditional coupon mediums. CEO What is the single greatest opportunity that digital coupons hold for brands? Coupons are proven to engage consumers and move product off the shelf.com blog.

360i. drug and mass) will continue to increase. and as more brands offer them across more touch points in the purchase process. What does the future of digital couponing look like? What are some predictions you have for the coming years? Consumer interest in mobile coupon redemption in highvolume transaction scenarios (such as grocery. Coupons.com enables digital coupon programs – including online printable. consumers will increasingly grow more comfortable with utilizing them. save to card and mobile promotions – for the nation's top brands and retailers.to a consumer: it’s about integrating the offer across the entire digital promotions program. Retailers specifically will increasingly integrate digital coupons into their communications in order to engage with people and promote coupon redemptions instore. 19 Couponing in the Digital Age: A Playbook for CPG Brands Spotlight On: Coupons. introducing an entirely new opportunity for consumers and brands to engage with each other along the entire path to purchase. more immediate areas include 1) retailer adoption and 2) consumers’ path to purchase. Coupons. Coupons.com is currently working with point-of-sale providers and retailers on the architecture for redeeming manufacturer coupons with phones. Engagement can begin with pre-planning at home and span all the way to on-the-go and in-store interactions.com already powers coupon galleries for retailers spanning tens of thousands of locations to drive more shopping trips to their stores – and we anticipate this trend will continue to grow. Regarding mobile couponing. We also predict digital will change the game with regard to shopper marketing. Digital coupons have proven their effectiveness.com blog.com / @360i .

360i. Driving trial/purchase/increase volume A little incentive can go a long way to get consumers interested in trying or buying your product. branded communities and/or a simple visit your website. brands face increased competition. many manufacturers and brands are supplementing their traditional shopper marketing strategies and traditional couponing tactics by leveraging digitally distributed coupons. 20 Couponing in the Digital Age: A Playbook for CPG Brands Digital Coupons: A strategy or a tactic? blog. Digital coupons can also connect your online campaign with an offline element. Steal share the from competitors For new product launches. Digital coupons can be used to help keep more price conscious consumers away from private labels. and loyal to your brand. thus closing the loop on your main objective of increasing sales. such as SmartSource.Digital Coupons: A strategy or a tactic? While digital coupons alone do not represent a strategy. Awareness A well-targeted use of digital couponing can be used to generate awareness and interest for a new or existing product. For refrigerated or heavy items. Loyalty Rewarding consumers for their loyalty is easy via digital coupons because it is likely that they have raised their hands to participate in communications such as email newsletters. The items that still require a traditional retailer will combine digital sampling registration with direct mail coupons for a free sample.com / @360i . some digital coupon vendors. Prevent erosion from private label brands As private label brands grow their product offerings at lower prices. digital sampling may facilitate traditional sampling efforts by circumventing the retail store. will hold your inventory and handle the shipment and fulfillment of sampling orders that are taken from consumers online.

and they can get you up and running within a few days.000 partner sites and limited retailers. reaching 17 million unique households per month across tens of thousands of different partner sites. 21 Couponing in the Digital Age: A Playbook for CPG Brands Digital Coupon Delivery blog. food and newspaper/ magazine sites. SmartSource. Like Coupons. RedPlum. the industry is dominated by a few key players: Coupons.com / @360i . There are also a variety of smaller players in the market that continue to adopt and grow new platforms. is the next largest supplier with 3 million monthly visitors and 1. owned by Valassis (a traditional FSI company). Partner sites range from grocery retail sites to lifestyle.26.Digital Coupon Delivery A digital coupon can be distributed in a variety of ways and through a variety of channels. com is that the latter provides brands with category exclusivity on their digital coupon campaigns.com has the largest online distribution network in the industry. SavingStar and Catalina. see more on p. Coupons. They are responsible for the backend and fulfillment of these coupon deals. Some of these players include Shortcuts.360i. RedPlum requires that users download a coupon printing plugin. com.com also offers coupons through the GroceryIQ app. part of News America (a traditional FSI company). and an app download is not required. has about 2 million monthly visitors and 1. Cellfire. Let’s discuss how one can launch a digital coupon campaign. While there are many players in the space. Consumers must download an application to print coupons. including some retailers. Two key differences between SmartSource and Coupons. owned by News Corporation.000+ partner sites. How to GEt staRtEd Most brands will work with a digital coupon supplier or aggregator to execute their digital coupon programs. They also have an optin email program. with more than one million subscribers.

” can alert consumers of digital coupon deals.com. marketers can provide printable coupons to visitors on their own sites (i.com / @360i . ˺˺ Retailer websites: Retailers like Kroger and Safeway are making coupons available directly from their sites. and allowing consumers to connect them to their loyalty cards or print them out. ˺˺ Email: Many sites will offer email newsletters that deliver coupons directly to consumers who have opted in. established “coupon content networks” and offer mass reach. similar to placing a media buy within an ad network. Each of these sites allow users to easily browse coupons that can be localized to their zip code and then printed out – the digital equivalent to a Sunday circular. 22 Couponing in the Digital Age: A Playbook for CPG Brands Digital Coupon Delivery blog. A coupon network may include recipe sites. The benefit of going directly to the retailer site is that people can be sure these coupons will be accepted at the register. ˺˺ Digital display media: Online banners and display media with calls to action such as “click for a coupon. Once established on one of these sites.com’s Concordance system works to integrate coupons into recipes. A digital FSI is a way to spread your product’s coupon or promotion across a large content network. An example of how Coupons. serving Kraft coupons directly from KraftFoods. media sites and a variety of other related destinations. Brands can integrate these coupons into their email marketing campaigns. for example within online recipe ingredient links. Some coupon suppliers offer geo-targeting and pay-for-performance deals.360i.Catalina. CouponBug.e. ˺˺ Brand websites: By partnering with vendors like Coupons. retailers. TheDealery and countless others. brands can offer their coupons beyond the supplier’s site and into a wide network of partner sites using what is called a digital FSI. The digital coupon suppliers mentioned above have large. has recently launched an online coupon site called Coupon Network. Other places where digital coupons can be distributed include: ˺˺ Coupon aggregators: Coupon Cabin. CouponMom. the company responsible for coupons printed onto grocery receipts.com). ˺˺ Social: Brands can share coupons with people on a variety of different social networks in a many different ways. One way to deliver these coupons is to integrate them into highly relevant content.

36% To get a "freebie" (e.com. FacEbook Coupons Facebook is an excellent environment for brands to distribute coupons to consumers.g. coupon) 34% To stay informed about the activities of a company 33% To get updates on future products 30% To get updates on upcoming sales 29% For fun or entertainment 25% To get access to exclusive content 22% Someone recommended it to me 21% To learn more about the company 13% For education about company topics 13% To interact (e.Couponing Innovations Now that we know the basic delivery and distribution methods for digital coupons. What has motivated you to "like" a company. free samples. Kickapps.. provide feeback) Sources: ExactTarget & CoTweet 23 Couponing in the Digital Age: A Playbook for CPG Brands Couponing Innovations blog.. Buddymedia or Coupons. let’s explore some more innovative ways of distributing digital coupons. or association on Facebook? 40% To receive discounts and promotions 39% To show my support for the company to others Social Coupons What makes a coupon a social coupon? Any coupon that can be shared among people online may be considered a social coupon.g. share ideas. Brands can serve up coupons directly from fan pages to their consumers with the helps of applications from vendors like Wildfire. One common use is to place a coupon offer on a non-fan Facebook landing page in order to encourage fans to “Like” your page and redeem the coupon. but there are a few subcategories of note.com / @360i . Coupons can be distributed on Facebook through a variety of ways. and many brands have used digital coupons as an incentive to get new fans or followers. brand. a recent report from ExactTarget and CoTweet revealed that the top reason consumers will “Like” a company or brand on Facebook is to receive discounts and coupons. In fact.360i.

Dealigg and Discount Patrol. which was live during the 2010 holiday season. Users will post and share coupons they have found. or post it to their social communities. Crowdsaver worked similar to Groupon. deal.360i. General Mills was the first to use Groupon to offer a local CPG a host of sites that house communities of avid couponers such as Mallicious. The deals. Because daily deal sites are mostly focused on getting consumers introduced to new activities and restaurants. the margins will generally prohibit such steep discounting unless costs are covered by broader promotional budgets. Groupon has more than 50 million subscribers worldwide. 24 Couponing in the Digital Age: A Playbook for CPG Brands Couponing Innovations blog. A legion of similar providers has emerged. These types of coupons are housed on a microsite (or other destination) and have two values. CPG or even national campaigns. Users of Social Grocery can add coupons from the Facebook app to their loyalty cards. or select the higher value which they can redeem after they either send it to three friends via email. Coupon communitiEs and otHER sociaL coupon oppoRtunitiEs: There are a variety of social coupon communities and couponing tactics that live beyond Facebook: ˺˺ Crowdsourced coupon communities: There are Group Couponing Another approach is “group couponing. These include sites like TheDealist and LivingSocial.A retailer example of a Facebook coupon program is Walmart’s Crowdsaver app. which took place only in San Francisco and Minneapolis. following in Groupon’s footsteps. as well as proprietary services from brands and retailers themselves. and that deal was for $20 for $40 worth of coupons on various General Mills products. where it is assumed at least three friends will see it.com / @360i . For CPG brands. where the coupon value is worth more if they agree to share it with three or more friends. ˺˺ “Tell-a-Friend” coupons: Vendors like Social Twist have created socially incentivized “tell-a-friend” coupons. Groupon began in 2008 as an email-based service for local deals activated only when a certain threshold of users sign up. both sold out within hours. have been minimal. Walmart set a threshold of “Likes” that an offer needed to reach before the deal became available to those who Liked it. and the best deals become crowdsourced to the top. similar to sites like Digg and Reddit. Today. It’s a social extension of MyWebGrocer. a technology company that powers many grocery store chains’ websites. Social Grocery is a new ecommerce application that lives within Facebook. Users can select the lesser value immediately.” which was popularized by Groupon. putting the success of achieving a deal in the hands of the consumers.

EmERGinG TREnds Group couponing leader Groupon is continuing to innovate in the CPG space.000 fans. The progressive coupon was supported through a variety of public relations tactics and in just two weeks. Another platform is Swagbucks. In June 2011 it launched a test program that delivers deals to purchasers via grocery store loyalty cards.com. badges. Though digital coupons have proven to grow fan communities. The coupon began at a low value ($0. Big Y shoppers in Massachusetts and Connecticut could purchase a coupon for a $39.99 seafood grill at a discounted price of $24 and have the deal automatically appended to their Big Y loyalty cards after the transaction was made online. Gamification Gamification is the process of adding game mechanics to experiences in order to engage and/or reward audiences. the brand introduced a progressive coupon on its Facebook Page (see image at left).75 off) and increased as people “Liked” the page. which compensate people in exhange for sharing content.800 to nearly 60. It’s incumbent on a brand to maintain engagement and add value for consumers beyond the occasional discount. Users also get rewarded for printing and using coupons on the site. Similar to that are sites like MyLikes. Knowing that the Healthy Choice consumer is a user of social media and interested in coupons. The use of a grocery store loyalty card as a payment vehicle creates many opportunities for CPG brands looking to simplify the 25 Couponing in the Digital Age: A Playbook for CPG Brands Couponing Innovations blog. the community grew from 6. Healthy Choice ultimately distributed more than 50.com / @360i . games and even simple web searches. We are seeing this being used for marketing programs and it is often paired with rewards in the form of coupons. Adding points. the majority of which is deal and coupon-related. PRoGREssiVE Coupons Progressive coupons are digital coupons that increase in value as more users fulfill an action.Another derivation of “tell-a-friend” involves rewarding users with coupons for sharing video content. Vendors like Crowdtwist and Bunchball incorporate game mechanics into websites. a loyalty program in which users can earn thousands of freebies for doing online activities such as surveys. For example. leaderboards and challenges are a great way to motivate action from users. Healthy Choice was looking to grow its Facebook fan base. ultimately reaching a “buy-one-get-one-free” deal. increase engagement and reinforce the brand’s reputation for providing great value. allowing users to win points that can then be redeemed for coupons or discounts.000 buy-one-get-one-free coupons.360i. it’s important to note that digital coupons alone cannot sustain an active community. pioneered by a vendor called Rewardshare.

barcodes or other formats. Other delivery methods for mobile coupons include digital coupon calls to action in mobile ads and mobile games. As noted earlier. Companies like Cellfire specialize in direct to card coupon programs for mobile devices. manage and retrieve loyalty cards from their smartphones. only a few retailers have the infrastructure to scan mobile coupon codes. mobile couponing is still an early adopter activity. Many manufacturers and brands are creating their own branded apps like Kraft’s iFood assistant. The number of smartphone applications that serve mobile coupons is growing rapidly. which allow shoppers to store. having access to mobile coupons may attract a younger. like CardStar. At their best. where users can load their loyalty cards with coupons that are served on their phones. as they are easier to work with than traditional coupons. Other examples of coupon applications include Coupon Sherpa and Yowza!! Mobile Coupons. as they don’t involve searching. which will continue to be a trend in the digital coupon space. There are also aggregator apps. Users can find coupons and add them to their shopping list from the app.in-store redemption process. clipping or remembering to take them to the store. branded apps. sorting. Target became the first major retailer to process and accept mobile coupons.com / @360i . Coupons delivered via mobile devices are gaining attention.com that helps users shop by compiling grocery lists and providing coupons. custom apps. but instead of receiving the discounts at the time of Mobile coupons Mobile coupons can be distributed via text message. mobile coupons offer the ultimate convenience. A new company called SavingStar takes a different approach to the concept of paperless mobile couponing. more affluent target that is not ingrained in traditional coupon clipping. mobile ads. For marketers. with less than 15% of mobile phone users having ever used a mobile coupon (Source: mBlox 2010). this model represents yet another iteration of paperless coupons. They also eliminate the need to have another loyalty card. SMS programs are popular with feature phones and are a great way to engage with consumers who don’t have smart phones. As of now. an application from Coupons. One example is GroceryIQ. which includes coupons. To date it is the first large scale retailer to allow consumers to redeem 26 Couponing in the Digital Age: A Playbook for CPG Brands Couponing Innovations blog. however.360i. Furthermore. coupons via mobile barcodes that can be scanned at the register. Their app allows users to link coupons to their loyalty cards similar to the way Cellfire and GroceryIQ can. Furthermore. their use is somewhat hampered since retail locations often lack the infrastructure to implement them at the register.

GEo-taRGEtEd adVERtisEmEnts hold much potential but they also come with some risk. 2010). Shopkick also incorporates scanning barcodes so that people can collect more information. that serve specials to consumers who check in with location-based apps. Another key difference between SavingStar and other save-to-card mobile applications is that they have national reach and strong relationships with a majority of retailers – plus a large amount of data that can be used by marketers to enhance their couponing efforts. Scanning has expanded beyond codes to a newly learned consumer behavior of tagging music. more than half of respondents said they wanted to receive location-specific ads. for example. There are a variety of vendors. and thus connecting offline and online Mobile + Location Location-based marketing is one of the hottest topics in digital today.360i. The Shazam application. Shopkick and Checkpoints. In a recent survey by JiWire. These codes serve as a great way to connect offline and online messaging. a similar platform. They can make a donation to the American Forests Organization. sends ads and digital coupons to people who enter a previously determined “geofenced” area with their mobile device.purchase. coupons and discounts to nearby stores is high on their list of priorities. and those points can be used to redeem coupons and discounts. like PlacePunch and LocalResponse. points or deals. These types of focused advertisements work best when users have opted in to communications. 27 Couponing in the Digital Age: A Playbook for CPG Brands Couponing Innovations blog. Shazam has converted this behavior for marketing purposes. allows users to tag music operating somewhat like an audio version of a QR code. 3. People are engaging on mobile phones and sharing their locations. SavingStar says that soon there will be many more options for users to transfer their savings including airline miles. They also indicated that mobile coupons were a more appealing incentive than check-ins (Source: JiWire Mobile Audience Insights Report. hotel points and an option to save at the time of purchase. the savings are transferred to one of four different locations. 2. are apps that allow users to collect points as they visit several retail locations. Mobile location-based points applications also provide a way to connect with users who are at your retail location or location of interest. one of the most downloaded apps to date. They can deposit directly into their bank account or PayPal account. consumers can redeem the savings in three ways: 1. PlaceCast. asking people to tag commercials. They can transfer them to an Amazon gift card. This model is very similar to a points program. and at the time being. 1D and 2D/QR codEs provide opportunities for brands to interact with consumers on the path to purchase. Blanket texts to unwitting consumers may create dissonance with your brand.com / @360i .

past and present behavior. is a similar platform in the space. they received coupons that printed right at the cashier. Android supports NFC in its most recent version of the operating system and there are rumors that Apple will add this functionality to future iPhones. which combines daily deals with location to get consumers not only to go to a location once. Valpak and Junaio paired up to provide a local utility to its application. Austin. There are also a variety of localized deal applications for mobile devices. MobiLE AuGmEntEd REaLity is an innovative technology that can be used to provide entertainment or utility to its users. Some examples include apps like Scoutmob. One great example is Old Navy's campaign in which viewers could "Shazam" TV ads for coupons and other exclusive offers. such as Sobe Lifewater. The second component of this program was tied to specific user behavior. Another example is SCVNGR Level Up. The Alpha program provided local deals to Facebook users in Atlanta.com / @360i . For example. Foursquare piloted a program where Safeway visitors could link their loyalty card accounts to their Foursquare accounts. Mobile NFC (near field communication) is an emerging technology that has been generating buzz in the marketplace. as digital coupons could be more conditional (i. in which nearby deals are delivered via a pop up in the video camera view of the app. San Diego and San Francisco. zip code or GPS location. Facebook announced its new Deals product. Coupious and Peekaboo that serve local deals and offers based on your current city. consumers who checked in to the gym received coupons for related products. There are five ways users are able to learn about deals in their area: 28 Couponing in the Digital Age: A Playbook for CPG Brands Couponing Innovations blog. etc. When store visitors checked in to Safeway. NFC is a short range protocol built into cell phones that enable you to “swipe” your phone near an NFC tag (which could be in packaging.) Mobile + Location + Social LBSN Location-based social networks like Foursquare. FacEbook DEaLs In 2011. based on geography. the majority of these which are focused on deals and not CPG coupons. Loopt and others offer deals based on where or how often users visit (check in to) various locations. Adoption of NFC would present a big opportunity for the coupon space. Dallas.360i. but to return more frequently and unlock greater rewards. Gowalla. on a sticker or at shelf) and pass data to the phone. SparkFly.campaign. FouRsquaRE In November 2010. The Foursquare-Sobe deal above rewarded people for checking into the gym.e.

With NFC. Verifone. Tippr. certain vendors are taking advantage of NFC’s low deployment costs and paper-thin chips to offer NFC-powered stickers that can be placed on consumers’ mobile handsets and scanned at specially equipped readers at participating retailers. a wireless transmission mechanism based on radio frequency identification (RFID) that allows devices to communicate with each other when they’re in very close proximity. Near Field Communications An emerging distribution opportunity involves near field communication (NFC). At that point. or embedded within the point of sale such as the Verifone credit card scanner commonly used by retailers. viagogo and zoos. NFC is in its infancy in the United States. Gilt City. with Google’s own Nexus S among them. OpenTable. Plum District. There are rumors – but only rumors – that Apple may include NFC in the next iPhone release. and Bling Nation aims to tie in mobile rewards with social sharing via a Facebook app that would power NFC deals. Google is also speeding up the roll out with the debut its NFC payment product "Wallet" in May 2011. ReachLocal. T-Mobile.˺˺ Updates through email and notifications ˺˺ A new Deals tab located on the home page ˺˺ News Feed stories when friends take advantage of a deal There are two major factors hindering NFC usage: 1.com / @360i . a scanner located at the point of sale. though Verifone announced that all of its new payment systems will include NFC. Verizon. Visa. AT&T. kgb deals. and such a jolt by a major handset maker will be needed to further NFC adoption. and certain brands will have the oppurtunity to become early adopters to see if NFC can impact consumer acquisition and loyalty. Nokia. PayPal or Facebook credits. Relatively few payment terminals in stores include NFC scanning.360i. The launch of Facebook Deals represents Facebook’s most notable investment in social commerce since announcing it would require game developers to utilize Facebook Credits for in-game purchases back in January 2011. 2. 7-Eleven did with First Data. HomeRun. Few mobile handsets include NFC functionality. Dairy Queen ran such a pilot with Tetherball. but it remains something marketers should keep an eye on as Google. thus encouraging loyalty rather than just one-off deals. PopSugar City. can instantly connect with a consumer’s mobile phone when placed near the terminal. people can instantly pay or redeem special offers for doing so. As an interim step. Samsung and others have all demonstrated broader support for it. 29 Couponing in the Digital Age: A Playbook for CPG Brands Couponing Innovations blog. Users can pay for deals using credit card. ˺˺ Personal messages & wall posts ˺˺ Sponsored Ad Units Facebook will also be publishing deals offered by third parties including Dealio. Marketers and retailers can offer special coupons and rewards for repeat purchases.

– with a lot of groups benefiting and comfortable from the status quo – manufacturers. ˺˺ Retailers want to control the experience and the 30 Couponing in the Digital Age: A Playbook for CPG Brands Spotlight On: MyWebGrocer blog.com / @360i . Who doesn’t like to save $10/$20/$30 on their weekly grocery purchases? And once this becomes a habit to those who have traditionally looked down on coupons. even consumers. retailers.Spotlight On: MyWebGrocer an interview with Gregg Vincent. brand awareness and loyalty. clearing houses. Marketers and service providers need to come up with a winning strategy for digital coupons. There are also additional challenges: ˺˺ Retailers are affiliated with different coupon vendors and each has different technologies and point-ofsale integration. ˺˺ Coupon-to-Card technology is limited to retailers What are the challenges to working with digital coupons and how can marketers overcome them? There is a multi-billion dollar industry in paper coupons with frequent shopper numbers (FSNs). This presents a bureaucratic and technical hurdle for marketers and manufacturers. The difficulty with digital coupons is that you are trying to create a solution for groups whose needs are already being met. The digital coupon industry is still in its infancy and therefore remains fragmented. VP of Consumer Products What is the single greatest opportunity that digital coupons hold for brands? Frugal shopping habits created during the recent recession present a unique opportunity for manufacturers to target a larger and significantly different audience of consumers who are trying to stretch a limited grocery budget. manufacturers are guaranteed to benefit from increased coupon usage and therefore increased sales. coupon vendors.360i.

data.360i. 31 Couponing in the Digital Age: A Playbook for CPG Brands Spotlight On: MyWebGrocer blog. Consumers will adopt a new process if it is convenient to them. yet they are faced with a dilemma. MyWebGrocer provides e-Commerce and emarkting solutions to the grocery and consumer packaged goods industries. What does the future of digital couponing look like? What are some predictions you have for the coming years? The future of digital couponing will be marked by relevant and highly targeted offers based on the things you like (purchase behavior) and powered by mobile technology (geo-fencing). Websites like SocialGrocery are trying to help move digital coupons to the mainstream by providing consumers with an entertaining and informative experience. New technologies must be explored to broaden the market and drive innovation. As they try to increase distribution by allowing coupon vendors to increase their distribution to other affiliates. Highly involved audiences make for better consumer adoption. It’s certainly an exciting time. It is inevitable that traditional paper coupons will migrate to all digital. The speed with which that happens is up to the industry.com / @360i . when and how customers access digital coupons. they create a customer service challenge in that they lose control of where. Beyond naturally increasing digital habits. what are some ways brands can help consumers become more comfortable with digital coupons? One way is to make digital coupons cool by harnessing emerging technologies.

com / @360i . 32 Couponing in the Digital Age: A Playbook for CPG Brands Measuring Success blog. A well-timed and planned coupon approach for your brand or product will minimize exposure to these consumers. for example.360i. OVER-REdEmption: The best way to prevent "doublingdown" is to create greater alignment between online and offline coupons and thereby prevent simultaneous offers.com. Digital coupon suppliers provide tracking for coupons that have been downloaded and then printed. as the retailer requires time to track and report on the offline component of the transaction. Measuring Success The success of your digital coupon program will ultimately depend on several factors: ˺˺ Brand favorability ˺˺ The curent household penetration of your product/category ˺˺ Brand development index ˺˺ Category development index ˺˺ The product re-purchase cycle ˺˺ The actual value of the coupon ˺˺ A purchase requirement ˺˺ When the coupon expires ˺˺ When the campaign launches All of the above could influence how well your coupon is received and how it spreads online. and gather insights into your consumers across the country. marketers can geo-target offers based on zip codes. Redemption information will follow six to eight weeks later.brands can use digital FSIs to test coupon values. A small subset of the population who will only buy products based on coupons and deals. Currently Kroger and Safeway have taken steps to prevent doubling down with a technology that prevents a printed coupon and a loyalty card coupon to be used in the same checkout. Coupons. can gather reads on how many prints have run within 24 hours of a campaign’s launch. but most cannot track redemptions unless they partner with offline coupon clearing houses that work directly with retailers and brands. These are people who don’t believe in paying retail price for anything. Communication with retailers is also important to prevent store sales running in tandem with your coupon offers. For example. states or DMAs. as they are not your most desired target market. It is important to test the various factors above to understand which combination works best for your product. Due to the volume of FSIs.

promoting and redeeming digital coupons. 360i helps its clients think differently about their online presence and evolve their strategies to take advantage of the new world of marketing communications – one where brands and consumers engage in interactive and multidirectional conversations. For consumers. Bravo and Diageo among others. Beyond having a deep knowledge of the space.” Current clients include Oreo. as the landscape is rapidly evolving with the advent of new technologies and ways of creating. digital coupons can become a seamless way to save money on the products they love. ideas and technologies.360i.com / @360i . jcpenney. about 360i 360i is an award-winning digital marketing agency that drives results for Fortune 500 marketers through insights. so that they can reach their audience in the ways that resonate most. For marketers they can offer improved efficiency and targeting.com or follow us on Twitter @360i. Understanding the digital coupon landscape and how to use digital coupons can be a daunting task. For more information. marketers should also strive to better understand consumer behavior. Coca-Cola. 360i was selected to of Ad Age’s Agency A-List and Fast Company’s roster of the “World’s Most Innovative Companies. distributing.360i. please visit blog.Conclusion D igital coupons have tremendous potential for both marketers and consumers. 33 Couponing in the Digital Age: A Playbook for CPG Brands Conclusion blog.

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