The sharing power of digital coupons
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Sharing is a powerful targeting mechanism, making social coupons such a success. Digital deals are a growing way for publishers to turn static banners into actionable and social advertising formats.
Coupons have a high uptake rate, as well as a high pass-along rate, according to eMarketer. In a Q1 2011 survey of its users, mobile Wi-Fi hotspot provider JiWire found that 44 percent made a purchase from a social shopping deal site at least once a month. And six in 10 mobile-Wi-Fi-using respondents share local deals with their friends.
The research firm BIA/Kelsey estimated in March that spending on deal-a-day e-commerce will reach $1.25 billion this year, and continue to rise. It's no wonder then that media companies are taking advantage of the coupon opportunity by partnering with deal sites like Groupon and LivingSocial, as well as increasingly launching their own digital coupon platforms, as Hearst and The New York Times have done. 
In addition to launching deal sites, publishers and advertisers have been incorporating coupons into ad units. The social ad platform SocialTwist powers ad units for brands in which consumers can share deals without leaving a publisher site. Vijay Pullur, founder and CEO of the company, told me digital coupons typically see a 10 percent redemption rate (already much higher than a typical ad unit), and coupons that are shared see a whopping redemption rate of over 50 percent.
Social advertising will only grow in importance, providing “human filtering” so that ads are targeted to the most relevant people, Pullur said. Email is still the most powerful vehicle for sharing coupons, followed by Facebook ― which makes sense, considering email is the most personal and targeted format for sharing content. This is backed up by SocialTwist's social-sharing study, which found that content shared via email receives the largest number of click-throughs.
In the future, Pullur envisions more advertising incorporating social features such as sponsored “likes” (giving away offers based on acquiring Facebook fans) and more social conversation being brought into advertising.
“Social is definitely a way that you can turn boring display click ads to engagement ads,” he said.
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