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Mobile coupons still lack scale: panelist

NEW YORK ? Although local mobile coupons are effective drivers of foot traffic, the scale is not there yet in terms of national brand adoption, according to a panelist at Borrell Associates? Local Online Advertising conference.  

The big coupon buzz about mobile marketing is in browsers versus application, but the local money is still in something as simple as SMS. The panelists discussed the move to the mobile Web and applications.

?The scale is not there yet in terms of these national brands delivering mobile coupons, but you have the power to make that meaningful for small businesses,? said Sandy Martin, Ft. Lauderdale, FL-based marketing analyst at Borrell Associates. ?Mobile daily deals companies such as Groupon give local businesses the opportunity to drive repeat business after the initial investment.

?Yowza is a self-serve platform, but I have no idea how many people in South Florida use it, so I didn?t sign up,? she said. ?Shooger offers 100,000 mobile coupons from more than 50,000 merchants.

?I went looking for coupon directories in my area, and there is not a local solution for a coupon directory.?

Ms. Martin decided to tap iSites by Genwi, and she created applications for iPhone and Android, through which she distributes coupons. She can also sell ad inventory.

While text messaging has the widest reach of any mobile channel, Ms. Martin is not convinced.

?With SMS, it is difficult to get the list to a size that is relevant enough,? Ms. Martin said. ?Restaurants have had a lot of success with it, but it can be more difficult for local retailers.?

Cost per acquisition
Applications have become popular vehicles for distributing mobile coupons.

However, the big challenge with applications today is getting users to use the app in a consistent way, according to the Wireless Developer Agency.

Most apps are only used six times in their lifetime, so brands and publishers must figure out how to achieve sustained usage.

One trick is to update the application often.

?The problem is with hundreds of thousands of apps in the market place, discovery can be very difficult,? said Konny Zsigo, president of Wireless Developer Agency, Lansing, MI. ?So many apps in the app stores means that you really have to run your own marketing campaign to drive downloads.

?It can be frustrating, because you have to spend money to acquire downloaders, then they use it three times and throw it away,? he said. ?There is a lot of work to get apps to be cost-efficient.?

Brands and retailer must do the math on the cost to acquire application users in advance. That can run five, seven or eight dollars per app user, per Mr. Zsigo.

At least 15 percent of people are interacting with any given brand or retailer on their mobile phones, per WDA.

?This session is not optional?it is mandatory,? he said. ?You are in the mobile business whether you like it or not, so you better figure out your strategy.?

WDA often gets asked ?When you introduce mobile to small business, or any business, what is the proper level of spend??

?I put it at 10 percent of the total marketing budget,? Mr. Zsigo said. ?Tally up all of the marketing that you?re spending on social and email and display and all the rest of it, take 10 percent of it and invest it in mobile.?

Final Take
Mr. Zsigo