The Marketing Xfactor

Date: 04/10/2008

Issue: April 10 2008

People: Erika Rasmusson Janes

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The Oakland Athletics Score with Mobile Coupons

The mobile channel opens up new opportunities to connect with fans.

When the calendar turns to April, it means that baseball is back from its long winter break. One team, the Oakland Athletics, may or may not lead the league in wins this year, but the team is a leader in its adoption of mobile marketing tools.

As far back as 2002 the Major League Baseball team used a text messaging platform to entice fans to answer multiple choice questions about the team. Those who did received a text reply thanking them for participating and giving them a mobile coupon for $5 off the ticket price for a future game.

"Once they got the instant coupon, it created a cool experience of people running around with their phones in the air saying, 'Where do I get my tickets?'" says Josh Ziegenbusch,senior ticket services manager for the A's. Since then, the team has expanded its use of mobile couponing.

Mobile coupons are one option becoming more enticing to companies looking to use the mobile channel, says Neil Strother, an analyst at JupiterResearch and author of the report, Mobile Coupons: Identifying New Opportunities Beyond Early Trials. The report shows that 30 percent of consumers are interested in mobile coupons -- up 6 percentage points from a year ago.

Last season the A's expanded its mobile strategy with Major League Baseball, sending an offer for discounted tickets to fans that had previously purchased tickets online and had opted in to receive the team's weekly e-newsletter and mobile offers. The fans received a mobile coupon for $4 off of a $10 ticket to a specific game. The blast reached thousands of registered users and 150 fans showed their phone screen to ticket-sellers to redeem the coupon, a number that Ziegenbusch was happy with.

For the A's, the mobile coupon offers make sense. After all, its customer base includes a tech-savvy demographic of young male fans with the latest mobile gadgets. And, "with this area being Silicon Valley, we're up to speed on latest technology," says Ziegenbusch. "It's obviously becoming a more popular way of marketing and promoting things, and we plan to do more of it in the future."

Indeed, mobile coupons are an attractive way for advertisers and marketers to connect with consumers. Advertisers like the concept because, according to JupiterResearch, redemption rates are higher than with print coupons (from 5 to 15 percent, versus 1 percent for printed coupons) and they're low cost -- usually less than $100,000 to produce. They're targeted, and also flexible: "Because it's not printed, you can change the offer around on the fly," Ziegenbusch says.

Still, overall consumer adoption is just 1 percent, according to JupiterResearch. And while its report shows that more advertisers are planning to use mobile coupons or promotions in the next year, the number is still small -- just 8 percent, up from 2 percent last year. Clearly, there are hurdles to overcome.

One issue, according to JupiterResearch's Strother, is that mobile coupons require a two-step process. "Consumers have to opt-in and then figure out how the coupon gets moved from phone to sale," he says. Few retailers, he adds, have 2-D barcodes scanners that would allow them to read coupons directly from phone screens. Some retailers are getting around this by using alphanumeric codes instead.

For the Oakland A's, the in-stadium offer presented a painless way for attendees to redeem their coupons by showing the phone screen to the cashiers. That's one example of why Strother feels that, at this point, mobile coupons work best for small, regional businesses or stand-alone venues with the ability to quickly train a sales force on what to do when a customer walks in with a mobile coupon.

"Advertisers may be excited, but it takes time for consumers to download an application or get signed up on some sort of text messaging alert," Strother says. "It's not [being] widely promoted yet. But there are early signs of a market starting to take off."

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