Yesterday, I read an article on the WSJ, labeled “The Coupon King” and it got me to thinking about advertising strategies.  Although the article has nothing to do with domains or the internet, it resurfaced the idea of coupons for consumers on the internet.

Just when you thought coupons were a dead industry because of the internet, an article is published proving otherwise. The article stated that Americans redeemed about three billion coupons in 2006, representing about $2.6 billion in discounts.  This proves that Americans still love to clip coupons, and I can assure you, it is not limited to just America.  Consumers in foreign countries across the world also love coupons, because they save you money on a product or service.  Who does not like to save money? 

There are many sites that have tried this coupon strategy on the internet, failed at it, and abandoned it forever.  They moved on to discount codes like SaveMoney, Fab101, etc.  Why did they fail at this coupon strategy?  Perhaps the coupons were not enticing enough, perhaps services offered were not targeted enough or perhaps they were not local enough. 

In my opinion, I believe they were not local enough and website owners/advertisers did not know how to take full advantage of offering them to consumers.  Geo domains remain the number one vehicle to deliver local targeted content.  Coupons deliver hidden value to advertisers and site owners when they are made available to consumers and used properly.

I am sure there are some out there that will say, we have tried it and it didn’t work.  I ask for you to please post why it did not work so we can analyze it openly and develop a strategy that does work.  There is a solution to every problem, however, first you must present the problem.    

Part 1:  Targeted coupons offered in a local area prove performance of advertising dollars spent.  Lets say a consumer does not buy something from the advertiser directly thru your site and only visits the website or doesn’t visit their website.  The consumer instead prints out the coupon, and takes it to the merchant to redeem it.  This reassures the merchant that his advertising dollars are being spent wisely on your site, as the coupon delivered a customer.  You get to double tap consumers, 1. Offering them a direct link to the advertisers website, 2. Giving them the option of a coupon to redeem in person.  Consumers love options, and the more you offer, the better results you will have in advertising results and in turn resulting in steady and rising advertising revenue.

Part 2.  By encouraging your advertiser to create effective coupons that consumers embrace on your site, you end up winning in the long run.  Guess what site that consumer will come to next time they are looking for a coupon from that advertiser.  Your site, and this is the start of consumer loyalty by meeting their needs.  Additionally you meet the advertisers needs and everyone wins.  This is also an additional revenue earner if you have to develop the coupon for the advertiser!  

Coupons are psychological to consumers, they say “You Will Save Money” and reenforce your business brand.  Internet coupons must deliver the following to consumers in order to be effective:

1.  Must be Local
2.  Must be a useful service
3.  Discount must be appealing to consumer (Free is always good)
4.  Design of the coupon must be enticing
5.  Must make the consumer feel they are taking advantage of the business    

Coupons bring a customer into a business or makes them buy a product at a discount.  If they come into a business, chances are they are going to spend more money on other products, as well as the product listed on the coupon.  They bring consumers and wallets into business doors.  Once this happens, it is the advertisers job to do the rest.

As an example, last night I went to a comedy club with the wife.  We got 4 free tickets valued at $7 each, for total of $28 dollars.  We invited our friends and had a great time. We ended up spending a total of about $70 dollars there, all because they gave us free tickets.  If they would not have given us the free tickets, they would not have made $70 dollars that night from us.  ROI of free tickets worth $28 equals out to over 100%;  $42 pure profit.  A no brainer strategy that is pretty smart in my book.

Please let me know you thoughts.  

(via WSJ.com)