Cutting Costs at the Expense of Privacy: Mobile Coupons Help Companies Get to Know their Customers Like Never Before.

With the rapid growth of mobile phone usage, retailers everywhere have started to pay more attention to the advantages of incorporating mobile marketing into their advertising campaigns.  Through the use of mobile coupons consumers are able to cut costs on the go and learn about the latest discounts at their favorite stores and restaurants.

However, these are no ordinary coupons.  By signing up for mobile discounts, many consumers do not realize these coupons have evolved into a method for companies to track customers and learn more about their spending habits.  While personalized mobile advertisements may seem harmless to consumers, they do come with a hidden cost; your privacy.

Much different from the coupons you cut out of the Sunday paper, these new digital coupons use special bar codes loaded with information regarding when it was obtained, where it was used and sometimes even the search term used to find it.  According to Ariana Eunjung Cha, business correspondent to the Washington Post, many retailers are now combining this information with “guesses about your age, sex and income, buying history, web sites you’ve visited, and your current location” in order to generate personalized customer profiles.

Companies say this new wave of mobile marketing will allow them to produce advertisements created uniquely for each individual.  Moreover, customers no longer have to cut coupons but rather will be able to effortlessly carrying them wherever they go merely by bringing their cell phones with them.

However, consumer advocacy groups argue that if not regulated mobile marketing, and, in this particular case, “behavioral targeting” can be used to exploit consumer information and can quickly transform into an invasion of privacy.  The question is, as in most debates regarding privacy, where do we draw the line?  The problem is most mobile marketing campaigns are still in the early stages of production and there is very little uniformity as to how exactly they work.

Robert Drescher, Chief executive of mobile coupon company Cellfire explained how much marketing companies already know: “We can already tell if you are near or inside a store and can give you particular offers, but that’s the kind of thing we’re moving fairly cautiously on so that the user can get to know us and trust us first”.  With this new technology, retailers can guess what exact products you might need, and can therefore target you with specific and effective advertisements and offers.

The bottom line is that there are clear pros and cons of the rapid growth of digital coupons, but the new wave of mobile marketing will continue to thrive as long as sales of smartphones continue to rise.  On the plus side, you will spend less time searching for discounts and deals for the products you are looking for and won’t have to worry about dragging around stacks of coupons in order to save money.

On the other hand, retailers now have access to more detailed personal information in order to create these deals.  Customers need to decide for themselves:  If you are concerned with privacy issues, here are a couple things you should know to keep marketing companies away from your personal info:

•  Pay close attention to the fine print when signing up for special offers and coupons – many consumers unknowingly give permission to their personal information when presented with a good deal. Be sure to always read the fine-print before adding a mobile coupon application.
• Don’t worry too much, nearly all programs are “opt-in”, meaning that you actually have to sign up to participate in these programs.  Keep in mind that this may also include opting-in to individual offers.
• Be wary of sending text messages to special numbers promising cheaper deals because you may be signing over usable information (i.e. “COUPONS” to 44554). If you choose to do this you may want to consider signing up for an identity protection service such as Intelius IDProtect.

It is clear that recent years have brought a boom in the amount of information available to companies on the internet.  Individuals just need to be aware of these changes so that they can decide for themselves where they need to be most careful.