Coupons, deals and offers are consistently regarded with more consumer interest and less "hostility" than other forms of mobile advertising. When you ask consumers in the abstract whether they're interested in ads on their phones they typically say "no" or "not at all." More experienced or sophisticated users with smartphones are more open to mobile advertising and generally more engaged. However the concept of mobile advertising (vs. the experience) is often distasteful to users. 

In previous research Jupiter (now part of Forrester) found that 30% of consumers had some interest in mobile coupons. Last year in our own survey, we found that closer to 43% were either "somewhat interested" or "very interested" in mobile deals/offers. And SMS marketer HipCricket had almost identical results to ours in its own survey last year. 

In our most recent survey (3/09) we found that 57% of respondents agreed "strongly" or "somewhat" with the statement: "I'm interested in any ad that offers me a discount or way to save money."

ValPak found dramatic results when it revamped its mobile site to make it more user-friendly. And coupon interest on the PC has been growing remarkably this past year. So there's no question in my mind about consumer interest. However, there have been many challenges with mobile couponing on the merchant side, both from an infrastructure perspective and in terms of a practical POS sale entry. There are also some residual merchant concerns about fraud, although those will disappear over time.

Mobile loyalty marketer Tetherball has just introduced something unique in the US market: RFID-based mobile loyalty/couponing. There's some complexity here but the system is very interesting. Here's how the press release explains it:

Tetherball’s unique 360˚ approach helps clients "tether" their brand to target audiences by identifying what their customers want and delivering mobile campaigns that interact with the ultimate call to action through permission based mobile coupons, mobile rewards, mobile sweepstakes and mobile notifications. Integrating traditional marketing methods such as in-store advertising, customers are engaged to sign up for mobile loyalty rewards programs offering promotional discounts. Upon joining, customers are given a Tetherball Tag™, a tiny RFID chip that is easily affixed to their mobile phones, which uniquely identifies them through Tetherball’s sophisticated technology platform. Tetherball clients are then able to send offers to their customers via standard text messaging. Offers are redeemed electronically using existing in-store RFID point of sale terminals or stand-alone RFID kiosks provided by Tetherball.

Mobiquitous™, a patent-pending real time web-based reporting system, delivers detailed visibility and analytics into coupon redemption rates and overall program performance. Whether it’s reporting at a campaign level, geographical level or for a specific period of time, Mobiquitous provides clients with “real time visibility” so that they can adjust quickly and leverage the real time nature of mobile marketing.

Essentially a customer is prompted to sign up for a mobile loyalty program (as part of that s/he affixes an RFID tag to his/her phone). She later gets an SMS message (targeted based on a range of parameters) and is given an incentive to visit a local quick service (fast food) restaurant -- a coupon. The user swipes their phone with the RFID tag in front of a physical kiosk and gets a paper coupon, which is printed out, to present at the register. 

In one sense this isn't a "mobile coupon" program because the coupons themselves aren't mobile. The prompt and notification of the deal is however. 

I spoke last week with Jay Highley, formerly of ChaCha, who is now President of Tetherball. He conveyed some of the results of the program, which has been quite successful and been running for some time. He said that the company has tried all the existing approaches to mobile couponing and is convinced that this addresses the deficiencies that they've found. Quoted in the release, Dairy Queen said: 

Due to the success of our program, we now average over 900 members per store and continue to see solid growth in membership and redemption rates - which is making a measurable difference in our year over year traffic and revenue.

Highly says the program is really about loyalty and not about couponing. When I asked him about the challenges of getting all these kioks installed, Highly said that the cost was inexpensive and the merchants liked the kioks because it removed the confusion of mobile coupon redemption from the register line and simplified the process. He added that the kiosks themselves in the stores become marketing vehicles for the program: people wonder what they are and investigate. 

Highly stressed also with me that this solves all the current challenges of mobile couponing: fraud, tracking, redemption. There can be no fraud because the system knows whether the user has already taken advantage of the offer and so on. 

We're likely to see lots of innovation around RFID and mobile marketing in the next few years. But this is a pretty interesting example already in the market.

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Related: Here's CBS News' piece on Tetherball.