Google has rolled out Zavers, a new digital-coupon product, in what strikes us as a bid for more consumer packaged-goods advertising.
The product allows manufacturers and retailers—chiefly supermarkets—to offer Zavers online, which consumers add to an account—either a supermarket rewards program, an account tied to a phone number, or a Google Wallet account, according to the description on Google's Zavers site.
Retailers and manufacturers can track the performance of these coupons in real time, rather than waiting for the laborious manual collection, redemption, and processing of paper coupons.
Some retailers, like Safeway, already have similar in-house programs for digital coupons.
Coupons are a staggeringly inefficient business today. In 2011, the most recent year for which numbers are available, $470 billion worth of coupons were distributed in the U.S., according to NCH, a research firm. Only $4.6 billion were redeemed. And in that year, only about 1% of coupons were digital.
Why does Google want to get into coupons? Its online-advertising revenues are heavily driven by e-commerce today, where it's easy to demonstrate a tight cause-and-effect loop between a consumer seeing an ad and making a purchase.
With coupons, you can show a similar link between ads shown online or on mobile devics and purchasing behavior in a physical store. And Google has shown a formidable ability to take that kind of data and relentlessly optimize the placement and targeting of advertising for maximum efficiency.
It will be fascinating to see what Google does with an obviously inefficient business like print coupons—though first, it will have to persuade consumers to adopt digital coupons.
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