This piece was written to accompany the feature: "strike Up the Brand" in the June 2001 issue of CRM magazine.
Planet U, based in San Francisco, Calif., offers an effective, online alternative to the wasteful couponing programs traditional mass media offer CPG manufacturers. By using the Web to better target and present coupons to consumers, Planet U can help deliver brick-and-mortar store purchases at a fraction of print promotion costs.
Such savings are particularly welcome in marketing programs that are notoriously inefficient. General estimates are that companies throw some $6.5 billion a year on FSIs (Free standing Inserts) like those you would find in newspapers. This, despite the fact that less than 2 percent are ever redeemed. More than 98 percent of that $6.5 billion is wasted.
With "e-couponing," consumers can select promotional offers from a retailer's Web site, the Upons.com Web site or from a number of other sites and strategically placed banner ads. After clicking on and selecting offers, consumers receive securely printed, fraud-resistant coupons by first-class mail in a few days. Alternatively, consumers can enter frequent shopper numbers and have the deductions made automatically at the point of sale.
Planet U can help target who sees what ad since all users fill out a brief profile to begin using the service. Marketers can select the basic criteria for the people who would receive their offers, which is a higher level of targeting. "When they use newspaper coupons, they are just sending things out randomly, and the most that they can hone in on a target is within a ZIP code," says Lisa Cruz, Planet U's director of marketing. "With Planet U, instead of targeting a sea of people within one ZIP code, you are doing household-level targeting."
That means marketers can promote dog food to dog owners and children's toothpaste to young families. Different strategies can be applied to stimulate trial, build a particular brand or increase loyalty. Such better targeting can also be employed for more effective sampling programs, a relatively new service of Planet U.
According to Jupiter Communications, a research, consulting and publishing firm specializing in emerging consumer online and interactive technologies, banners featuring coupons or discounts have a click-through rate of 20 percent. Cruz says the actual redemption rate of Upons, as calculated through the clearing house, is not far behind, averaging 13 percent for mail and electronic coupons. That makes it six times more effective than print media.
Since the company knows which households redeemed the offers, they can provide a variety of reports to manufacturers running Upons promotions. Reporting is in an aggregate form. "While they are not getting information on Mrs. Smith specifically," says Cruz, "they do get information about people like her that are in her demographic group."
Planet U got its start working with retailers promoting private-label products, and increasingly, national brand marketers are participating. Four of the five major US supermarket chains and more than 150 national brand names promote using the service. The company was acquired earlier this year by Transora, broadening its reach to CPG marketers and creating potential synergies with that e-marketplace in such areas as collaborative promotion planning.