Yet more proof old and new media MUST mix. From MediaLife: For radio, the promise of digital coupons

medialifemagazine.com

Radio
For radio, the promise of digital coupons
By Mike Stern
Nov 22, 2010 - 1:02:19 AM

Radio has long worked as a medium for driving consumers into stores, and quite well. Think of the Pizza Hut spot airing during afternoon drive time, targeting commuters on their way home as they ponder what they’ll be having for dinner.

Zip, off the expressway they go, aiming for the Pizza Hut closest to the house.

Now radio is coming up with a new way to drive consumers into stores, and in a way that merges this very traditional medium with the newest of media, digital couponing, where stations offer listeners deals on advertisers’ products and services.

Example: A coupon, delivered via email, offers $15 off dinner at a local Italian restaurant or 10 percent off on dog grooming services. The offers are sent to a station’s list of dedicated listeners.

It’s the hot new thing in radio, and it comes at a good time. While the economy is coming back, advertisers, local advertisers in particular, are still looking for opportunities that deliver results they can measure directly, in the form of revenue.

Couponing benefits stations in a number of ways.

It’s another stream of revenue, but beyond that it gives the station something else to sell, a new product, so to speak, and the opportunity to sign on businesses that have not advertised in the past. Once they come in on a coupon deal, they’re ripe for up-selling.

“Some of our partners have attributed broadcast buys from new clients to being able to use digital couponing as a conversation starter,” says Dean Pederson, the founder and principle of Dialog, a platform stations can use to execute coupon programs.

Digital coupon offers also strengthen a station’s bond with listeners by giving them chance to save money during tough economic times.

In the last few years digital couponing has seen huge growth, from an estimated 38 million users in 2008 to over 45 million in 2009, or about 14 percent of the U.S. population, according to the Web site Coupons.com.

Further, of those 45 million people, more than 13 million exclusively use digital coupons, eschewing the traditional paper coupons found in newspapers.

What’s new is the increasing use of radio. Much of the early couponing was through online-only vendors.

Radio stations bring to couponing their tremendous reach, which makes the service that much more attractive to businesses deciding whether to sign on.

“As radio stations get involved it could really change the makeup of who interacts with these coupons,” says Jim Nichols, a senior partner at the strategic marketing services group Catalyst SF. “I’ll bet it will broaden the appeal.”

The two primary types of programs stations are getting involved with are deal-of-the-day programs, known as social couponing, and more traditional retail discount programs.

Social couponing originated in Chicago with a company called Groupon, but the model is being widely copied.

The system is fairly simple:  Consumers opt in to receive a daily email detailing that day’s deal. But there are two all-important catches that are really at the heart of the deal. The offer is good for one day only, and it’s only good if a minimum number of people sign up for it.

The effect is to set off a user-driven viral campaign as consumers who are interested in the offer reach out to friends to come in, lest they see the deal evaporate.

The consumer then buys the discount coupon online, and the revenue is split 50-50 between the station and the business offering the coupon. The station pays the third-party firms that execute the program.

The advantages for the business are several. It receives the revenue upfront, before it delivers on the good or service, and it gets the benefit of the radio spots promoting the deal, without laying out a penny.

“If we sell one or 1,000 [coupons], there is tremendous value in the promotional spots from the radio station,” explains Dialog’s Pederson.

The best candidates are service businesses where costs are fixed so the extra traffic is all additional revenue.

For businesses selling goods, such as restaurants, Nichols suggests doing the math carefully when crafting an offer. If the average bill at a restaurant is $40, he suggests offering a deal in the range of a coupon for $30 of food for $15 so the additional $10 in spending helps mitigate the cost of the offer.

He also suggests using the program to drive business in non-peak times. “The idea of a marketing technique that could not only fill my restaurant on a slow night but could result in return traffic and has guaranteed revenue is tremendous.”

The other type of digital couponing stations are exploring involves more traditional retailer discounts.

For example the web site Edeals.com recently signed on to provide digital coupons for a number of radio stations, including properties owned by CBS and Journal Broadcasting.

Edeals.com COO Mike Palso says radio stations had been toying with this type of program but hadn’t fully committed. “They had dipped their toe in the water but hadn’t put in the type of time, effort or funding to really get traction.”

Partnering with companies like Edeals.com enables stations to provide listeners with access to discounts from national retailers and local businesses personalized with the station’s branding.

Each station’s page features individual branding, including having demo-appropriate deals featured prominently. 

Palso says partnering with companies like his or Dialog really helps stations take full advantage of this opportunity.

“When new technologies comes out we are already testing those things and have it available allowing them to stay right on the edge without having to make a big investment to be there,” he says.

© 2010 Media Life

via medialifemagazine.com

Posted via email from The BING KIMPO Show!