Category — Couponing
Can this little mobile bar code be worth a significant slice of a $320 billion market opportunity to Google?
It’s not a question that one of the cornerstones of Google’s future earnings growth will be in the mobile market, but what is debatable is whether its paid search revenue template that has worked to date through traditional desktop computers will be the way they get there.
Recently Henry Blodget of the Silicon Alley Insider wrote about why Google shouldn’t be thinking that mobile advertising is the ticket to higher revenue.
Specifically, he took Google CEO Eric Schmidt to task about his statement that Google could make more through mobile advertising than the $20 billion it currently takes in through traditional desktop computers.
He does the math this way:
“Google currently makes about $20 billion a year in desktop. For Google to make “more in mobile than desktop,” the targeted mobile advertising market will have to grow from less than $1 billion today to, say, $50 billion (assuming Google pulls down a mind-boggling half of it).”
While I agree with him that users aren’t going to tolerate intrusive mobile advertising interfering with their communications, if Google can find ways to deliver value to consumers through mobile, maybe those revenue fantasies can become more of a reality.
And a key way I believe that Google could deliver that value is through mobile couponing. In fact, as this earlier Silicon Alley Insider article by Dan Frommer covers, Google has tipped its hat in this direction already.
The secret is using the little square bar code above in conjunction with a mobile device’s camera to tap into the large existing market of paper coupons that appear every week in publications across the country.
For a point of reference, in free standing inserts alone (FSI coupons added to daily and weekly newspapers), there were 257 billion coupons dropped in 2007, according to TNS Media Intelligence and Marx promotion, up 1.6% versus prior year.
The average face value of these coupons was $1.26, which represents over $320 billion dollars of value delivered to consumers by major and minor marketers across the country.
This doesn’t even include the value of coupons through direct mail, in store coupon machines, or coupons with your register receipts.
In contrast, the total amount to be spent by marketers on online advertising in 2008, as estimated by eMarketer, is $24.9 billion, which was recently revised downward versus prior estimates.
I agree with Blodget that $50 billion for a mobile advertising market is a big number, even with Google being involved. And if Google thinks they’ll be able to growth mobile revenues by jamming traditional advertising into a mobile handset, they certainly won’t get there.
However $320 billion in coupon spending is a bigger number, and if by levering mobile to provide true value to consumers versus just ads, Google could maybe do to traditional couponing what they have done already to traditional advertising.
August 26, 2008 No Comments
Now this piece from Promo Magazine talks about some clever PR. The current feel good color is green and that is what Cellfire, a company that’s trying to break out mobile couponing to the masses, is wrapping itself in. The idea of delivering coupons in the right context (at the shelf) is one whose time is coming and what better way to show the outdatedness of paper coupons than to label them as tree-killers. However, while the PR is good, mobile couponing is truly not going to take off until WalMart starts accepting them at their registers….
September 14, 2007 No Comments