Coupons get the network effect via Facebook

Founded in 1998, Coupons.com could easily have gone the way of the newspaper. Instead the $1 billion company keeps coupons relevant as ever with social technology.

Today Coupons.com has a new way for brands to connect with their loyal customers on Facebook.

Turns out coupons are the No. 1 reason consumers "Like" brands on Facebook, according to an Ad Age/Ipsos Observer survey.

I'm not talking about daily deals. I'm talking good old fashion coupons. CNET readers don't strike me as the coupon-clipping types, so you're probably as shocked as I am that coupons still exist.

Mountain View, Calif.-based Coupons.com has managed to stay relevant since its founding in 1998, with the same founder and CEO at the helm. The company announced in June that it would reach $100 million in revenue for the year. That month it raised $200 million at a $1 billion valuation.

The new coupon platform is called Brandcaster Social. An offshoot of Coupons.com's existing Brandcaster platform, it helps brands offer printable coupons on their Facebook Fan pages. Apparently this hasn't always been easy.

Coupons.com founder and CEO Steven Boal. Coupons.com

"Brands can always post a coupon on their Facebook page by dropping a link on their wall," Coupons.com CEO Steven Boal told CNET. "What this platform extension does is embed a full user experience into your Facebook page automatically. It takes about 48 hours or less to make it happen."

Coupons.com is removing the need for original coding to make a coupon experience for consumers. They're automating the process, solving what has apparently been a big problem: The frustration of the 100,001 person who clicks on a coupon that stopped at person 100,000. Brandcaster Social removes a coupon automatically once it reaches its allotted print limit. Consumers are alerted that the coupon has reached its print limit and they should check back later.

"When coupons run out, the shutoff isn't obvious within Facebook," says Boal. "This was frustrating for both the consumer and the brand. The challenge has been to manage a good consumer and a good brand experience all in one place."

Energizer tested Brandcaster Social. The campaign resulted in 60,000 "Likes" for the battery company in two days--a 40 percent increase in its fan base--and 75,000 coupons printed in two days.

"We may only drop a handful of coupons each year," says Serge Traylor, brand manager of communications at Energizer. "We don't want to offer coupons all the time but at certain times of the year, like before big shopping events, it makes sense."

Energizers Brandcaster Social coupon displayed on the brand's Facebook page. Coupons.com

Traylor says Energizer hasn't had "the best experience" with Facebook-based coupons in the past. It seems consumers can get pretty uppity when they take the time to click on a coupon and don't end up getting one.

"We didn't have issues on the consumer side," says Traylor of his Brandcaster Social coupon. "There were built-in ways for consumers to ask questions. That really helped."

Brandcaster Social provides campaign analytics. There's the obvious metrics of how many "Likes" were acquired and how many coupons were printed, but brands can also track how many consumers found out about the coupon from a friend's newsfeed. Energizer learned that during their coupon campaign more than 25,000 friends of Energizer fans printed the coupon.

As newspapers struggle to find readers who use their coupons (Sunday newspapers have a redemption rate of 0.6 percent), Coupons.com boasts a 19 percent redemption rate.

Even with the proliferation of daily deal discounts, there is still room to grow in the online coupon industry. Boal explains that consumer packaged goods represent the second largest category of offline advertising spend, but it is fifth or sixth with online advertising because brands have struggled to measure the success of online return on investment.

Coupons.com has more than 2,000 clients including Clorox, General Mills, Johnson & Johnson, Kellogg's, Kimberly-Clark, Kraft Foods, CVS, Kmart and Walgreens.

"Fifty percent of our client base will be on this platform in the next several months," says Boal. "I like the expression 'it takes 10 years to build an overnight success.' For almost 14 years we've been on a same path to success. Our platform has just adapted."

Oh, and for the record, 57 percent of Americans say CUE-Pon, not COO-Pon.

About the author

Regina Hope Sinsky writes about startups. She studied journalism at the College of Charleston and spent several years in television writing and production. After moving to the Bay Area she decided all the best stories came from startups, so she jumped into tech writing. Regina specializes in interviews with interesting people doing nonobvious things with technology.

 

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