Mobile Coupons are just one tool for Local Businesses.

Nancy Cook – Vice President, New Media Business Development – Valpak

Nancy Cook is responsible for the development and implementation of Valpak’s new media strategy and digital products, including the Valpak Digital Network (Valpak.com), Valpak Deals and SMS texting. She spoke with eMarketer’s Tobi Elkin about the prospects for mobile coupons, how retailers can successfully incorporate them and the hurdles that prevent their growth.

eMarketer: What are the drivers of mobile coupons?

Nancy Cook: The consumer is the primary driver. The way consumers use mobile—searching not only for offers but for other things—is helping increase demand for mobile coupons. Obviously, being in the coupon and promotional offer business for a very long time, we know that people respond to the relevancy of an offer. If you put an offer that’s considered a good value in front of any given audience segment and there’s a need, consumers will engage. A strong offer will work in any space—and mobile even more so, because it can be relevant when a consumer may actually be ready to make a purchase.

eMarketer: What about any inhibitors?

“[R]etailers may be posting mobile coupons, but are they really ready to implement them?”

Cook: The inhibitors have to do with the implementation of mobile couponing as well as consumers getting comfortable with using them. From an operational standpoint, retailers may be posting mobile coupons, but are they really ready to implement them? Do they know how consumers will redeem the coupons? Is their staff trained? How do they track mobile coupon redemptions?

eMarketer: Have you seen many difficulties with mobile coupon redemptions?

Cook: The majority of the businesses that we deal with, many of which are local, won’t have optical scanners for a very long time. They’re going to have to step into mobile couponing gradually.

eMarketer: What are some of other challenges that you see in implementing mobile couponing and making it easy for consumers?

“We want to solve the fragmentation issue by being platform-agnostic.”

Cook: We want to make it as easy as possible for the consumer to find the coupons when and where they are. From a best practices perspective, we’re not married to any particular technology or platform. We want to solve the fragmentation issue by being platform-agnostic. For example, we offer coupons on all five of the major mobile platforms with an app—iPhone, Android, Palm Pre, BlackBerry and Microsoft 7. Consumers don’t have to struggle to find us. We will continue to promote our advertisers’ content, coupons and deals on these platforms.

eMarketer: How do you work with retailers to overcome the challenges presented by mobile coupons?

Cook: Mobile by itself is not necessarily going to win the day for an advertiser or a retailer. We provide tools for driving traffic and bringing consumers to the store—whether that’s through a printed piece, mobile web or texting. What retailers and small businesses across the board really care about is the ROI on the spend.

eMarketer: How do you employ targeting for mobile coupons?

Cook: We use services like Claritas, which basically profiles different audience segments for the likelihood to purchase a certain type of service. Or we look for certain spending levels or demographics that are most likely to purchase a service, and can help business target their messages. Consumers in an older neighborhood, for example, might be most likely to use a new roofer.

eMarketer: What role do daily deals play in relation to mobile coupons?

“The daily deal space is limited in that the Groupon and LivingSocial models represent a single point in time for a consumer to buy a deal, and then it’s over.”

Cook: Daily deals are a very important part of the savings space, but we view it as just one tool for advertisers to reach and engage consumers. The daily deal space is limited in that the Groupon and LivingSocial models represent a single point in time for a consumer to buy a deal, and then it’s over. We certainly see deals, particularly the prepay voucher, as an important tactic for a business to use, but it’s really just another way for a consumer to engage with that business. For example, a merchant might do a very strong promotion as a prepay deal one month, then offer a coupon for that same promotion through the summer.

eMarketer: What are specific mobile couponing best practices?

Cook: Advertisers should leverage mobile along with other tools—print and texting. The No. 1 thing that they need to focus on is making the offer relevant and timely—and they also need to give the consumer choice and convenience.

We also advise small businesses that the offer needs to be attractive enough for a consumer to come in and not feel like there’s a bunch of fine print around it. It has to be relevant and easy.

We recommend that retailers post a picture of the mobile coupon at the point of sale not only for the consumer, but for person who’s working at the register. They need to know how to handle the coupon to ensure the transaction works in whatever POS system they’re using. From a retail chain perspective, there’s an education process with respect to mobile.

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