Online Couponing & Other Marketing Trends

Marketers have found the world of online couponing and digital marketing harder to navigate than they thought.

In May, talk show host Oprah Winfrey mentioned a coupon for a free Kentucky Grilled Chicken meal, and within a few hours, the link went “viral” on Twitter, Facebook, blogs and various social networks. More than 10MM coupons were downloaded, with some of them photocopied (despite instructions not to). KFC ended up giving away 4.5MM in a two-day span, then pulled the plug. It issued rain checks but the fallout left the chain looking stupid.

Now Marsh’s Supermarkets in Ohio and Indiana have stepped into the same gooey, sticky mess by offering $10 coupons to the 3,100 loyal customers signed up on Facebook. Within only a few days, 3K coupons morphed into so many as fans shared them with their social networks that the company had to cancel the promotion, issuing a statement saying “we at Marsh recently stuck our toe in the water to try this whole social media thing. Unfortunately, we ended up stubbing it. Our recent $10 coupon offer on Facebook has instead left us red in the face and many of our loyal customers angry. Rightfully so. For that we are truly sorry. Needless to say, we’re learning.” Companies are learning to include expiry dates and bar codes on their digital coupons, as well as requiring customers to enter some kind of information so as to tip off the issuer to the number of likely participants.

In other marketing news,

• The bad news for restaurants just keeps on coming: traffic declined 2.6% in the quarter ending May 2009, the biggest decline since 1981. Specifically customer counts were off 2% at QSRs, down for the seventh out of the last nine months. Casual dining was down 4% and midscale 6%. Bucking the trend are restaurants in NYC, where traffic this Summer is above the usual levels.

• Pizza Hut was the first national pizza chain to offer an ordering App for the iPhone and iPod touch, and the result was over 100K downloads from the App Store in 2 weeks. The App lets consumers order Pizza Hut food directly from their Apple mobile devices.

• Technomic has been tracking the sale by restaurant chains of corporate units to franchisees. The aim in many cases is to reduce debt and raise cash, but it also means franchisors must sweeten the deal, and can help franchisees who otherwise might be cut off from credit markets by acting as the lender or facilitating a loan. Within the Top 400 chains, Pizza Hut was the largest franchise company in the world with 3,627 units, followed by Burger King (2,758 units), and Taco Bell (2,391 units).

• The single biggest challenge for brands in the current economic environment has been retaining customers as private label and down-trading become more extensive. The Chief Marketing Officer (CMO) Council has prepared a study of customer retention in the communications industry (see attached executive summary). The entire report is available from Broad Street Licensing Group for $300.

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