Mobile Coupons Deliver Big ROI for Advertisers

mobile couponsWhat would a 38% sales response rate to an advertising message mean for your company’s bottom line?

Or how about bringing in $1 million in incremental revenue in just 8 months?

Sound impossible?

Not for some companies who use mobile text messaging as an advertising strategy.

Text messaging has become a way of life for many Americans today – with more than 250 million mobile users in the U.S. alone. As such, the mobile phone is expected to become the most powerful marketing tool for brand owners, small businesses and professionals.

A study by JP Morgan analyst Imran Khan bears this out. He expects mobile advertising to grow by 45 percent this year, to $3.8 billion, with the majority of that spent on SMS (short message service) advertising.

One Central Florida based mobile marketing company is generating big responses for some of its clients. imediaReach offers fully trackable mobile coupons powered by its platform developer, Hipcricket.  According to imediaReach’s web site, 38% of respondents to a Nestle Waters campaign purchased an Arrowhead product as a direct result of their mobile marketing program.

And Cleveland radio station, KISS FM, brought in more than $1 million in incremental revenue in eight months – a 24 percent increase it says was directly related to its text messaging campaign.

Now, I’ve never been a fan of text messaging. It just doesn’t seem worth the extra expense on my phone bill. But after seeing a demonstration of the mobile coupon concept, I can appreciate how businesses can profit from this strategy. The concept relies on permission marketing and the ability to encourage customer loyalty.

Here’s how it works: A restaurant offers a 10% discount coupon to customers who text a series of numbers, ex. 12345. When the restaurant receives the text, they respond back to the customer with a request for an email address to send the 10% discount coupon.

Capturing the email address enables the restaurant to send the customer a new offer each week. By offering a reward for their patronage, the customer is much more likely to become a repeat visitor to the restaurant.

imediaReach says its customers pay about 5 to 10 cents per message. That’s far less than the cost for direct mail.  It costs 28 cents just to mail one postcard, not counting the other production costs on top of that. It’s easy to see how companies can generate a much bigger ROI from mobile messaging.

So, is mobile messaging the future of advertising?  Or will Apple’s new iPad change the playing field yet again?  That’s a discussion for another day.

Image courtesy: Stuart Miles / freedigitalphotos.net



4 thoughts on “Mobile Coupons Deliver Big ROI for Advertisers”

  1. Hi Gloria,
    I don’t know what the rules are in the States, but in a lot of (European) countries you are not allowed to (as in your example) ask people for an email address to send a coupon and at the same time use that email address to start sending them a newsletter.
    Nowadays there are a lot of restrictions using e-mail in both B2C and B2B marketing. People have to give you permission to send them an e-newsletter and if you want to do it the right way, it has to be double opt-in.
    Don’t you think mobile messaging will be restricted in the (near) future too?

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