Savvy shoppers know this, bloggers know this and JC Penney now knows this: couponing is a national pastime. About 92.5 million US shoppers redeemed a digital coupon last year, and the number of mobile coupon users is expected to reach 53.2 million in 2014, according to eMarketer.
AdExchanger spoke with Coupons.com CEO Steven Boal about targeted advertising opportunities and the growth of mobile in the coupon world.
AdExchanger: How large is Coupons.com now and what does it consist of?
STEVEN BOAL: We’ve got about 500 employees, and we issue vouchers and coupons in 17 countries. These are coupons printed by consumers, printed in the store, on the web, mobile phones, kiosks, etc. We have a publishing platform that is on tens of thousands of websites everyday, a media platform that covers our owned and operated websites and is syndicated across many of our affiliate websites and a very tightly intertwined relationship between our properties.
In which areas are you seeing the most opportunities for growth?
SB: There’s the obvious digitization that provides growth across all lines of our business, but one of the most germane to your readers is the growth of our media platform. We put ads in front of consumers and work with data that’s generated off our platform to get the right ads in front of the right consumers.
Tell me more about how you’re targeting customers and collecting data.
SB: We track what people see online, how people engage with what they see and then literally what they purchase in stores. Brands, for the first time in an actual transactional way, can place media in front of consumers and then measure the effect of that media with actual in-store purchases by market, by time, by creative — that sort of stuff.
In terms of data, consumers give us their intent to purchase certain products by searching in categories or selecting certain coupons, whether they be digital or print, and actually shopping in stores. That is an enormous amount of data, and I think many would argue that purchase intent and actual purchase data are probably the two best indicators of future intent. We collect that data using a proprietary system that we built ourselves from consumers across our tens of thousands of websites, and we use that data to decide what type of ad to show consumers and where.
What we’ve found is that with ad media, you can target people based on coupon data, shopping data, etc., and you can leave a brand impression with the right person at the right time based on cycle of purchase. Targeting coupons, on the other hand, isn’t a good strategy on the internet. I can talk more about this later, but consumers don’t like it when they get a different value from another consumer.
How are you segmenting your customers?
SB: There are traditional segments and then non-traditional ones where we find high correlations between categories. Those correlations could be between breakfast and beverage, salty and sweet foods or ready-to-eat products and certain beverages. There’s so much individual data that we collect that essentially each consumer is her own category.
The other thing is that the consumers who visit our properties are all in pre-shop mode. It is rare to have people stumble across our properties if they’re not actually going there with the intent of shopping. Almost 60% of shoppers who visit our site plan to go grocery shopping in two days. 40% of them shop within the next 24 hours. And so taking knowledge about the consumer and then knowledge that they’re going to be shopping within the next 24 to 48 hours — those two bits of data come together to create a branding opportunity that is hard to find elsewhere.
Are you planning to go deeper into programmatic buying ?
SB: Right now we have media available across our platform, but we don’t go out and buy additional audiences to generate impressions and inventory. We tend to sell media that runs across our owned and operated properties. Programmatic ad buying is something we’d probably look at down the road, but right now we’re focused on selling the right kind of display, the right kind of buyer on our owned and operated property.
How many advertisers are you working with?
SB: Oh, it’s in the hundreds. The advertisers we work with are in traditional packaged goods, brand manufacturers, grocery, drug and mass retailers and also entertainment — things like toys, DVDs, etc. Restaurants too.
Do you see yourselves working with agency partners in the future, or will you continue going directly to the marketers?
SB: We will be working with agency partners in the very near future, but I can’t say anything beyond that right now.
What trends are you seeing with mobile coupons in terms of how people are accessing and using them?
SB: The rate of change is definitely accelerating. We’re seeing the use of mobility increase across our portfolio. The way that people use coupons in a mobile environment is very similar to the print environment. In a pre-shop mode they’re choosing things they plan to buy, they’re adding them to a list — something like Grocery IQ, which manages both your shopping list and your coupon list in one place, automatically applying those coupons without having to swipe a barcode at a grocery store.
So no QR codes?
SB: QR codes work well in low-volume environments. In grocery, drug and mass checkouts, where it’s extremely high volume with lots of products in a basket, the idea of trying to scan a barcode on a phone is fraught with peril. The way we do it is you identify yourself in some way through either a pin mechanism or your loyalty card ID, or you type your phone number into the pin pad and your coupons are pulled from Coupons.com in real-time, right into the point of sale.
What can you say about how the affiliate marketing industry has evolved over the past few years?
Any thoughts on last click attribution and its role in affiliate marketing?
SB: It’s not something that really impacts us because people tend to go to our sites already in a pre-shop mode. First click, last click is about what you build to send people to your site, and that doesn’t exactly fit in our case.
Let’s go back to what you mentioned about consumers not wanting to receive different valued coupons. What do you mean by that?
SB: There is a big difference between targeting ad media and targeting coupons. Out of a collection of coupons, sorting and managing the display and interface to serve the right ad to the right consumer is fine. But targeting coupons by giving one person a $2 coupon and someone else a $1 coupon for the same product is simply not a good strategy. On the internet, everyone comments and tweets and blogs about the coupons they find, and we see a lot of complaints for this sort of thing. Geography is a well-established way for delivering different value because there are different market conditions and competitive conditions, and even then there are complaints.
Looking ahead, what are you focusing on to continue attracting customers and advertisers?
SB: We are putting a lot of attention on mobility. I don’t mean just redeeming digital coupons but what is the intersection between relevant advertising and promotions and couponing in a pre-shop environment — so stay tuned on that one.
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