• by Jack Loechner , Staff Writer @mp_research, May 11, 2003

Online Couponing Becoming More Popular with Consumers & Marketers

David Hallerman, reviewing online marketing, reports that when companies distribute coupons online, they can target delivery in ways that are impossible in the Sunday newspaper or on the side of a cereal box. For example, customers have to register before getting coupons from one of the Web sites that specialize in them, and they might even personalize the coupon incentive along with the finer targeting.

When NFO WorldGroup surveyed over 800 US consumers last year about the advantages they see in registering with Web sites, the second-most cited reason is to receive special offers or coupons.

Advantage US Consumer Sees in Registering With Web Sites (% of respondents)

• Receive order confirmations 24%
• Redeive special offers or coupons 22%
• Gain access to newsletters 17%
• Receive online billing 10%
• Reduce postal mail 6%
• No advantage; register because it's required 21%

Source: NFO WorldGroup

Brad Smith, manager of Internet branding and advertising, General Mills, says "As time has gone on, we are using the Internet for many more of the traditional marketing activities-direct marketing, e-mail campaigns, promotional marketing, some couponing through e-mail."

Since the origin of online coupons offers enhanced targeting over offline, says Hallerman, marketers can track their use later on more closely than with the paper-based code that only tells the company where and when the coupon was published.

As an indirect marketing influencer, online coupons offer several benefits:

- They help companies collect data on consumers while increasing sales.

- They give Web publishers tools to woo deep-pocket CPG firms to online advertising and marketing.

- They act as incentives to entice consumers to company Web sites (even without registration).

- Promotional offers are highly effective at motivating online purchases; 49% of those who purchased products online used a coupon or promotion code, according to DoubleClick's third annual "Consumer E-Mail Study."

- They help create a cross-channel approach to consumers; A survey by Valentine Radford, a Kansas City, MO-based advertising agency, found that 49% of US consumers will redeem online coupons either offline or online. And an additional 9% redeem them offline only.

- From the consumer point of view, one key attraction of online coupons is greater savings on average: $0.97 online versus $0.81 offline, according to CMS and The New York Times.

Coupon Usage in the US by Product Category (% respondents)

• Groceries 36.9%
• Health care 33.3%
• Beauty 32.7%
• Restaurants (not fast food) 24.5%
• Books 23.2%
• Toys 22.9%
• Fast food 21.7%
• Computer equipment/software 21.4%
• Electronic equipment 21%
• Clothing/shoes 14.2%
• Music CD's 9.1%

Source: Burst Proprietary Research

You can find out more here at eMarketer.