Mercury Fund backed Koupon Media, wants to simply coupons

According to the Coupon Information Corporation (CIC), $500 million is annually drained as coupon fraud from the $4 billion coupon industry. The industry is expected to grow, to offer 51 Mn deals by 2015. Koupon Media, a Texas based startup, is trying to leverage this through its Digital Campaign Management (DCM) platform which also claims to combat digital coupon fraud.

Koupon Media was founded in 2011 by mobile technology entrepreneurs T.J Person and Scott Hutchinson. Koupon Media in late 2012 announced that its Digital Campaign Management (DCM) platform is Apple Passbook-enabled, the first B-2-B digital offers platform to be integrated into Passbook.

The company is built around a business model that helps brands, agencies and merchants to deliver single-use mobile offers to consumers for easy and fraud-free redemption directly from their smart phones at retail stores, thus eliminating the need of merchant POS system modification. Other than this, it also guarantees zero fraud, zero complications in software installations and brand’s access to real time reports. There is no long drawn development timelines and retailers get clearance in weeks which helps in early adoption and use. The Koupon Media platform is integrated with variety of retailer point-of-sales systems, which provide brands both enhanced product control and detailed analytics to better determine consumer buying behavior.

In November 2012, Koupon Media upgraded its platform with a feature called Tap-to-Redeem which prevents coupon bootlegging by limiting the timeframe of each open offer. It places a countdown clock next to the barcode and once a coupon has been opened, a user is given maximum 15 minutes to redeem the offer at a POS terminal. Unless offers are redeemed within the allotted time they simply lose their value.

Digital couponing has clearly intensified in recent years. Digital coupon site like RetailMeNot filed for a $230 million IPO very recently. While RetailMeNot only offers coupon through their own website and mobile platforms, Koupon Media allows retails to easily create and provide their digital offers using their DCM platform.

LTP View: According to a study by BI Intelligence, mobile redemption rate is at 10% compared to 1% redemption rate in traditional coupons which is a big positive. With the integration of the Koupon Media DCM platform into Apple Passbook, Koupon Media may prove to be a strong player in providing centralized creation and measurement of digital deals and coupons.