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Mobile Couponing on the Verge

  |  August 22, 2006   |  Comments

We really mean it this time.

A man walks into a store with a cell phone in one pocket and a couple of bucks in the other...

No, it's not the start of a joke. I was the man, and the store was Hollywood Video. Earlier in the day, I had downloaded a mobile application called Cellfire to my phone. It's a mobile coupon distribution company that recently launched its service nationwide.

And far from being a joke, mobile phone couponing is making the above scenario very interesting for all types of retailers.

The process was easy enough. I went to the Cellfire Web site and typed in my mobile phone number. Within minutes, I had a text message that prompted me through the download process. Once installed, I typed in my Zip code, and the offers were downloaded and displayed. There were offers from Carlson Wagonlit Travel, Hollywood Video, Bath & Body Works, and 1-800-flowers.com. And the offers were quite good. In fact, that's what prompted me to go to Hollywood Video: it was an offer to buy one used DVD and get another used DVD free.

There are lots of companies out there trying to establish themselves as leaders in the mobile couponing space, and there are several variations of how mobile couponing can be done. You can send consumers offers via text message. You can prompt them to text a short code for offers. Or consumers can browse coupon sites via WAP (define) and, as is the case with Cellfire, you can ask them to download an application to aggregate offers on the phone itself.

Whenever you read about mobile marketing, you'll inevitably read about what's happening in Europe and Asia and how consumers can show cashiers a scannable barcode and receive their offer. Here in the U.S., however, most point-of-purchase scanners can't read a barcode on a phone, at least right now. Instead, consumers receive offers on their phones and either show them to the cashier or tell the cashier the coupon code.

Currently, Cellfire has a handful of national advertisers, which is good news. It has national distribution, which is also good news. And it's touting response rates as high as 29 percent. That's really good news.

A couple of things, however, could hinder Cellfire's growth. At this point, its service only works on the Cingular network and only on select handsets. (When you start exploring the mobile world, you quickly find the trickiest thing to maneuver is the issue of model-network-application compatibility.) But Cellfire assures me it's quickly expanding its carrier partnerships and handset availability.

A colleague of mine was laughing about an article from 2001 that touted mobile couponing as the next big thing. Here we are in 2006, and I'm writing a column saying we're just about there. The reason I'm excited about mobile couponing today is because mobile phone users are much more sophisticated than they were in 2001. People are using their phones for much more than talking. In fact, a recent In-Stat survey finds 40 percent of mobile users are paying for non-voice communication services, such as text messaging, picture messaging, and mobile e-mail. There's a level of comfort now with using your phone to send text messages, take pictures, browse the mobile Web, and download music, ring tones, and applications.

People want to save money. They always have their phones with them, and they're comfortable using their phones. Services like these make it easy for them to save without collecting and keeping up with traditional paper coupons.

So to finish my mobile coupon story: I went to Hollywood Video, found a couple of DVDs, and presented my phone to the cashier. Dramatic pause.... To my surprise, I wasn't the first customer to present her with my mobile coupon. But here's the rub: the registers weren't set up to accept the coupon. The cashier did, however, find a manual way to give me the promised discount. Interestingly, she mentioned that the mobile couponing program had been advertised on the in-house video network (which shows movie trailers).

The experience wasn't flawless, but it was pleasant nonetheless. I mean, I did get a free DVD out of the deal. As a result, I'm still excited about mobile couponing and mobile marketing as a whole. I'm not ready to say that mobile couponing is the next big thing. That would be so 2001. But I am willing say mobile marketing is coming into its own and you should consider making it a part of your marketing mix. Check it out and let me know what you think.


Pete Lerma Pete Lerma began his advertising career in the traditional side of the business, where he spent six years managing accounts for clients such as Coca-Cola and Subway. He then realized interactive marketing was where it's at and, in 1998, joined Click Here, The Richards Group's interactive marketing division. During his tenure at Click Here, he's forged relationships with major online publishers, networks and technology companies, and these relationships contribute to his perspective on the interactive marketing industry. As Click Here's principal, Pete oversees accounts for high profile brands including Atlantis, Hyundai, Travelocity, and Zales. His group has won numerous awards for their strategic and creative work, including recognition from the IAB, Ad:Tech, The One Club, Graphis, and Communication Arts. Pete serves on the board of directors for the Dallas/Fort Worth Interactive Marketing Association and also contributes to the marketing blog ChaosScenario.

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