From a cost standpoint, I can see the attractiveness of this. But, from a consumer standpoint, I really don't like this idea. We already have way too much advertising cluttering up everyday life ... and I don't want an ad when I get a bill (I already paid the company).

As I was thinking about this, my friend Jake the social media consultant said it better on his personal blog here, with an example about Amazon:

http://www.communityguy.com/index.cfm?commentID=933

Businesses might like this, but I'm not sure this is getting them closer to making raving fans out of their end customers -- which translates into long term revenue from repeat purchases and offsets the processing fees.

Good thinking outside the box, though! One of the biggest annoyances for me is merchants who only take cash -- like my dry cleaners. I perceive this as based on the owners' frugality and aversion to the processing fees.

Any other solutions?

Oh, forgot this part. My biggeset takeaway from Jake's post:

"Just because you can, doesn't mean you should."

Tim,

I can certainly understand the statements, however I think a merchant, such as a small drug store, would welcome the idea of having a coupon on the bottom of a consumer receipt that the consumer could then use in his store (for instance, a cough syrup company offering 10% syrup) - that type of activity is a benefit to merhchants and consumers, not to mention drives more activity and help everyone. just a thought

10% off cough syrup - -sorry

Tim I agree with your general annoyance with advertising 'bombardment'. However, I do have to say that every once in a while as I am bombarded I do find some timely advertisement for something I really need or want. I suspect that by acting on that particular advertisement I then become part of the 1 to 3% response rate the advertiser was looking to achieve to justify his time and cost to do the promotion in the first place.

I think the key issue here with advertising on credit card receipts is 1) will it negatively affect consumer behavior enough that retailers will be discouraged from participating in the program (it may not be negative at all) and 2) will there be high enough response rate on the coupons for advertisers to pay the required fees to motivate retailers to participate. If those two things can be kept in equilibrium, it stands to be a successful model.

@ Paul - You brought up a good example. The key here is the ad is definitely relevant to the relationship (drugstore and customer) and somewhat relevant to the consumer (they might not have had a cold in ages). Anything done to increase that relevance would decrease the annoyance level of the ad to the consumer.

I encourage you to find ways to make the ads you place as relevant as possible to the consumer and as least intruding as possible to achieve results for your advertising clients.

@ Bryan - Even if it doesn't negatively affect consumer behavior, that doesn't necessarily mean consumers like it. The ads may annoy them, but may not change behavior out of convenience or other benefits a store offers. Who knows, they might switch to a competitor (consciously or unconsciously) when they learn the other store doesn't put ads on their receipt. There's no way to know for sure.

Note: If you knew me better, you might consider me on the 'lunatic fringe' of this issue. For example, I use ad filtering software on my browser, so I see probably 1% of display ads I would otherwise on the web. I opt out of anything I can, and I've even stopped coupon mailers coming to my house. I don't watch (any) TV either.

All that to say -- take my comments with a grain of salt -- but I hope you can find something useful here!

Tim,

Excellent comments -- remember our goal is to empower the merchant, not piss off all parties :) Comments will make the model better

@Bryan: I think the thinking that a 3% return is acceptable is a big part of why we, as an industry, are having so much trouble with consumers generally. This is a nasty circle that has resulted in decreasing response rates, consumer annoyance, and reduced customer loyalty.

The idea that 3% return is worth a 97% annoyance rate is just crazy. Sure, there might be a situation where someone responds, after you mention. But I reminds me of the girl who gets so worn down by the guy continually asking her out that she just caves in to shut him up. It's not the beginning of anything positive, it's simply a way to quiet the annoyance.

And let's not kid ourselves here - overwhelming quantities of ads anywhere there is room to shove them doesn't help everyone. It helps the retailers, it mostly annoys consumers, and every once in a while, consumers might trip across something they can use. Most of the time it's just more noise, and if there's any voice at all it's saying: "We don't respect you enough to focus on what we're here to do as a core business - we're simply trying to milk this relationship for everything it's worth."

If this weren't the case, baseball fans would love the name "Petco Park"...

@Jake - I agree with your annoyance point. In fact, I often feel like Kramer on Seinfeld when he went to post office and tried to convince Newman to 'unsubscribe' him from the U.S. Postal Service. I'm sure that my daily mail experience is the same as your, 10 pieces of mail/advertising of which 1 is what I actually wanted and needed to receive.

My point is more around market forces and capitalism. As long as the return on investment is greater than the cost, people will advertise. So if that means that a .05 response rate is all that’s needed and they get it, they will continue doing it. But even though the outcome is positive for the advertiser, there is negative externality for us, annoyance and noise.

So it's the same issue with the power plant. They generate electricity, make money, and get what they want. But at the same time they pollute which as a negative effect on everyone in society. One way of controlling that is for the government to step in to try and control this negative externality by having the power company put controls in place to control the amount of pollution that is emitted. As the power company complies they also incur greater costs to generate that same electricity which then raises consumer rates. So we in effect are paying to control the negative externality.

It’s unlikely that the government is going to step in and address our problem for us, so the only way our situation will change is if 1) advertisers can’t get the required return on their investments to continue doing them (unlikely) or 2) if the market can create more efficient channels of matching buyers and sellers (but this still would not capture the entire market).

On the second point, search engines and key word searches have been a great way at diverting some traffic into more effective and less annoying channels.

So as long as capitalism is the driving force in our economy, people will continue to spread the noise and chaos to our dismay because their return exceeds their cost.

@Bryan

"So as long as capitalism is the driving force in our economy, people will continue to spread the noise and chaos to our dismay because their return exceeds their cost."

See, this is the funny thing. Return is abysmal with traditional advertising/marketing. Let's be honest, a 3% (or lower) return rate is a phenomenal failure by ANY other means but advertising. We've all bought into a belief (perpetuated mainly by practitioners and lazy marketing people) that these return rates are acceptable. They're not.

Consumer voice and buying power has gotten stronger and stronger in the past few years (or decade?) and there is a clear shift in what consumers want and expect. Yet, we continue to dial up the noise, as an industry, and then can't figure out why nothing's sinking in.

This isn't a question of whether the return is larger than the cost, it's more like is there ANY return on this at all? I have marketing money to spend, therefore I'll try as many things as possible.

In the case of amazon adding banner ads: Do they really NEED the money? Is their core business suffering? Nope. Is the risk to their core audience worth the minor additional revenue? In my mind it's not. Clearly they've gotten caught up in the "stockholders demand more return" game. That's a nasty, zero-sum game for all involved.