A comparison of the effectiveness of e-mail coupons and mobile text message coupons for digital products
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A comparison of the effectiveness of e-mail coupons and mobile text message coupons for digital products Philipp Reichhart & Christian Pescher & Martin Spann
Received: 24 October 2011 / Accepted: 15 March 2013 # Institute of Information Management, University of St. Gallen 2013
Abstract An increasing number of companies are focusing on e-mail and mobile marketing to promote offers. The aim of this study is to analyze a coupon campaign for a 67 % price discount on downloadable personal computer (PC) software. The campaign was carried out via e-mail and mobile text messages. Using an opt-in database, we gathered data from more than 37,000 participants and compared the response and conversion rates for both e-mail and mobile text messaging. The results indicated that the response rate for e-mail coupons is higher than the response rate for mobile text message coupons, but text messages yield a better conversion rate and a higher number of total purchases. After calculating the price elasticities for both communication channels, we found that the promotional price elasticity is higher for mobile text message coupons than for e-mail coupons. Keywords E-mail marketing . Mobile marketing . Text message . Coupons . Digital products . Price elasticity JEL M30
Introduction Internet marketing has created new opportunities for marketers to target specific audiences. In recent years, the use of Internet marketing has rapidly increased (Liao et al. 2010; Shankar and Batra 2009). Through Internet marketing campaigns (e.g., e-mail marketing), consumers become more Responsible Editor: Christopher Patrick Holland P. Reichhart : C. Pescher : M. Spann (*) Institute of Electronic Commerce and Digital Markets, Ludwig-Maximilians-Universität München, Geschwister-Scholl-Platz 1, 80539 Munich, Germany e-mail: [email protected]
involved in generating or communicating advertisements than they do through traditional marketing channels, such as TV, newspaper or billboard advertising (Holland 2008). E-mail is a powerful vehicle for marketing campaigns because e-mail marketing can be an inexpensive and quick way to reach consumers (Bonfrer and Drèze 2009). E-mail is widely viewed as an effective Internet marketing tool (Chittenden and Rettie 2003). Additionally, marketing through mobile devices is a rapidly growing practice and has become increasingly popular as a result of the possibility of worldwide distribution (Lee and Benbasat 2004; Tsang et al. 2004), direct response and the virtual ubiquity of the medium. In the United States, the mobile phone penetration rate is more than 90 % (CTIA 2010). Penetration rates in Europe have reached more than 100 % since 2007 (Zaher 2008). In Hong Kong, this rate is above 200 % (OFTA 2013). E-mail has the advantage of being a well-known and widely used communication channel through which advertising information is sent to consumers (e.g., via newsletter subscriptions). However, the use of mobile text message advertising has been rapidly increasing. Both channels allow marketers to reach c
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