Here a pattern for mobile coupon campaign redemption from Borders Books

The Netsize Guide 2009 had an interview of Scott Seaborn the Head of Mobile of Ogilvy which had several good snippets of findings and data. I particularly liked the details of a Borders book store mobile coupons campaign which is one of the first I've seen to report campaign data over a period of time. Oilvy said that the campaign achieved a peak of 23% redemption rates in the first months, and 9 months later was still generating 4% redemptions.

First, lets be clear - a redemption rate is INHERENTLY superior metric to a "response rate" or say a "click-through rate". Redemption of a (mobile) coupon is a "conversion rate" which means the customer actually spent money and the campaign produced an x percent actual measurable increase in actual business. A click--through rate or a response rate is only that a consumer was interested to click on an interative ad, but not all of those will result in actual sales.

So, now we had a peak redemption rate of 23% for mobile coupons in selling books at a bricks-and-mortar bookstore. That is ENORMOUS. It is about ten times more than the RESPONSE rates on the internet, such as a click-through rate. But these kinds of campaigns will always have a novelty factor to the recepients as well as a diminishing rate of return. No matter how many coupons you give me, there is an absolute limit to how many books one average person can consume. So when the coupons appear, there is a "spike" of business, as there were pent-up demand customers, who had thought of buying something, and the coupon acts as a catalyst to activate that pent-up demand. But then over time, the peak behavior disappears and the base consumption level is revealed.

Well, we also now have good data form Borders via Ogilvy, on what that might be. Ogilvy says that the end level was 4% where the redemption levels bottomed out. This is still better than the typical RESPONSE rates on the internet! Even after the peak use is gone, mobile can sustain 4% redemption rates (conversion rates). Wow. That is good news. This is a magical money-making machine. Even for non-mobile and non-tech non-digital industries, like bricks-and-mortar book sales, mobile can increase business by a significant factor, on a sustainable level. This is a major finding in itself.

But we also have a first case of a benchmark model now. A mobile phone coupons campaign can expect a peak performance of 3 months (and should reach roughly 23% redemption rates for a reasonably successful campaign). Then whatever the peak level was (Gillette had a 98% redemption rate in South Korea once, BMW had a 30% conversion rate in Germany and McDonald's had a 12% conversion rate in Croatia) you then reduce the redemption level monthly by one quarter until you level out at 4%.

Obviously this is not yet in any way verified as a model, but its a first model. And thus better than nothing. So now mobile ad campaign designers can use this as a benchmark and see how they peform against it. And my benchmark is out in the open public domain, so you can also reference this blog if you are pitching a mobile ad campaign to your customers..