CPGs Starting to Use Social Media to Deliver Offers
By Dan Alaimo
There is potential in providing consumers with digital coupons via social media, but the practice is barely getting started. Most consumer packaged goods marketers are focusing on Facebook and its 900 million-plus monthly users worldwide, but they also are using Twitter and blogs, as well as less popular social media tools like MySpace and Google+.
“The number of coupons going out via social media is currently very small,” admits Wade Allen, president, CouponFactory, a Dallas-based provider of digital coupons. We’re talking about a sub-segment of a sub-segment of a sub-segment. While it is small today, we see it becoming a very strong conduit for placing digital coupons.”
Of an overall $400 billion couponing market, only one and a half percent is digital, which includes print-at-home, save-to-loyalty-card and mobile, and of that, a much smaller percent is on social media. But the enthusiasm of digital coupon providers is much bigger.
“Social couponing is changing the way consumers receive coupons, and is changing the way brands build their consumer base. Brands that neglect to engage consumers in these social mediums will pay the price in the future as consumers come to adopt them as a place to engage with the brand and receive promotions and coupons,” says Allen.
Facebook remains a potent force in the online world despite various reports that show people spending less time on Facebook, the percentage growth of users flattening, and reports about big advertisers backing away from Facebook. Allen says coupons are delivered on regular Facebook pages controlled by the CPG companies where the number of “eyeballs” remains huge, and not in an advertising environment.
A survey by InSites Consulting found that 80% of U.S. companies have a presence on Facebook, while 48% are on LinkedIn, 45% on Twitter and 31% on YouTube. Yet leveraging social media is still new to many firms. Eleven percent of companies were integrating social media into their corporate strategy, and 17% were in a “mid-integration” stage.
The main advantage CPG companies see in Facebook is the ability to provide the coupons while keeping consumer “eyeballs” on the dedicated brand page, rather than redirecting them someplace else. Facebook itself has gotten so big that its strategy is to never have people leave its site.
“Brands are recognizing that there is a lot of power in conveying not only promotional material, but content within that social media. Coupons are one of those pieces that they are now focused on delivering,” Allen says.
Coupons can be distributed on social media in several ways: by using a separate tool, like CouponFactory’s, which enables the printing of the coupon; by using the Facebook app; or by redirecting the consumer to another site, which is less desirable to the brand. The value of the coupon can be increased in certain circumstances, such as when the offer is shared with other people. In many cases, the coupons are provided subject to “like-gating” — the consumer has to “like” the brand before the coupon is delivered, Allen says.
“Facebook seems to be the primary network growing in use,” notes Matthew Tilley, director of marketing, Inmar Promotion Network, Winston-Salem, N.C. “New options from various technology providers allow for greater control over the experience on the Facebook app platform, leading to innovations such as progressive face values — increasing the face values based on the amount of ‘shares’ or ‘likes’ a shopper can generate.”
The biggest advantage of using social media to distribute promotional messages is giving the users of the media outlet the ability to help promote the coupon. “For example, users can like, share, tweet, and or retweet an original post. Not only does this enable the content to go ‘viral,’ it also comes with the ‘stamp of approval’ of a friend,” Tilley says.
Allen sees the viral component of social media couponing growing strongly in the next six to 18 months. “You can print a coupon now for $1 off, or if you are willing to share it with your friends through the social medium, you get a richer offer. That incentivizes your customer to spread the word virally,” he says.
To combat fraud, Allen points out, the better providers do not show the coupon image, which can be captured and manipulated; they don’t use the “printer console,” the window that pops up when a person goes to print and controls the number of copies made; or they don’t provide a downloadable file like a PDF that can be easily transmitted and reproduced.
In distributing coupons on Facebook, CPG companies should heed the recommendations of the Coupon Information Center Best Practice Document, says Bud Miller, executive director of CIC, Alexandria, Va. “They need to make sure that if they are using coupons on social media that they take all the precautions they would for any other type of Internet print-at-home coupon. They should also understand the power of social media and that things can get out of control very quickly. There’s no such thing as a local promotion.” For example, a company may put out a coupon intended to boost business in one city, but may see it spread all over the country.
Companies should also use the new DataBar codes for these coupons and make sure they are working properly. “The last thing you want is an inaccurate bar code out there that is distributed via the social media,” Miller says.
Among the other social media, Allen says Twitter with its 140-character limit “tends to be a bit shorter and rudimentary in its delivery, and appeals to a slightly different audience. But the power of Twitter is the ability to disseminate that coupon by sharing.” Followers can click on a link to go to a medium where they will have a visual experience, whether it is a destination page or a Facebook page.
Bloggers, especially the more respected of the “mommy-bloggers,” tend to have a high level of trust among their readers. “They are completely trusted because they are conveying information that they know to be best for their family, and sharing it with their followers.” They can become major brand advocates, telling followers, “these are the coupons you should be getting; this is the quality of products; these are the brands that I like, which is a big influencer.” If they get samples from manufacturers, they generally disclose that, Allen notes.
The grocery market is not ready for mobile coupons yet, he adds. This is because many retailers do not have “the operational infrastructure to handle someone walking up to the point-of-sale system with 15 coupons on their phone, and with a big line of other customers standing behind them.” Getting to the point of efficiently handling mobile coupons could be a multi-million dollar investment to update the point-of-sale systems of retailers. However, if mobile is used with save-to-card systems or near field communication, it could be easier to implement.
In the near term, “Facebook is a very visual, engaging medium. You’ve got the friend component. You’ve got the social component. It is about building that property, that extension of your home brand into this growing social giant,” Allen notes.