Determining a value for a coupon

TECHNICAL FIELD

0001Embodiments relate generally to determining, on behalf of a coupon provider and based on multiple factors, a value for a coupon.

BACKGROUND

0002The approaches described in this section are approaches that could be pursued, but not necessarily approaches that have been previously conceived or pursued. Therefore, unless otherwise indicated, it should not be assumed that any of the approaches described in this section qualify as prior art merely by virtue of their inclusion in this section.

0003In general, a coupon is a certificate or other document that entitles its holder to accept an offer described or referenced by the coupon. The offer, also subsequently referred to as the “coupon offer,” may be any type of offer, but typically is an offer by the coupon provider to provide a customer with one or more goods or services at a particular price or discount. For example, a coupon might indicate $1 off or 25% off of the purchase price or might indicate a particular price, such as $10. Alternatively, the coupon offer may be an offer to provide the customer with a gift in exchange for the performance of an act, such as purchasing a good or service.

0004A coupon often takes a “hard copy” form, such as a paper certificate, with printed images and/or text describing terms of the offer. “Redeeming” a coupon is the process of a customer accepting a coupon offer by presenting, referencing, or otherwise providing the coupon while purchasing, contracting, or otherwise transacting with another party. For example, a customer may redeem a hard copy of a coupon by handing the copy to a clerk during a purchase at a retail store. The clerk may then provide the customer with the offered discounted price or gift.

0005One technique for distributing coupons is to include printed coupons with newspapers, magazines, or other items that are distributed to customers. One example of an item with which coupons are distributed is a printed receipt. For example, some retailers print receipts at a point of sale on register paper on which coupons have been pre-printed. As another example, some retailers print coupon(s) on a receipt at the time of the transaction for which the receipt is printed, thereby allowing the retailers to dynamically select which coupon(s) appear on the receipt based on the product(s) that were purchased during the transaction.

0006Recent distribution techniques now provide customers with opportunities to print their own coupons. For example, a number of websites provide search engines or catalogs with which customers may locate offers and then print coupons for the offers they find. The printed coupons may be used in the same manner as any other coupon.

0007Other recent distribution techniques involve creating digital coupons. One such technique involves creating unique digital coupons that are saved to an account associated with the customer, such as a store loyalty account. The customer may redeem such digital coupons during online or physical transactions by presenting an account identifier, such as a store loyalty card or an oral identification of the customer's telephone number, for the associated account.

0008Another digital coupon-based technique involves creating unique digital coupons that may be stored on a computing device. The digital coupons may be transmitted from the computing device at a point-of-sale during a transaction using any of a variety of mechanisms. Thus, there are numerous ways in which coupons might be distributed to customers.

0009One problem that coupon providers (for example, product manufacturers and service providers) face is determining a value for a coupon during a particular coupon campaign. Current techniques do not provide enough flexibility, accuracy or commercial benefit for coupon providers.

BRIEF DESCRIPTION OF THE DRAWINGS

The present invention is illustrated by way of example, and not by way of limitation, in the figures of the accompanying drawings and in which like reference numerals refer to similar elements and in which:

<figref idref="DRAWINGS">FIG. 1</figref> is a flow diagram that depicts a process for determining a value for a coupon, according to an embodiment of the invention.

<figref idref="DRAWINGS">FIG. 2</figref> is block diagram of a computer system upon which embodiments of the invention may be implemented.

DETAILED DESCRIPTION

0013In the following description, for the purposes of explanation, numerous specific details are set forth in order to provide a thorough understanding of the present invention. It will be apparent, however, that the present invention may be practiced without these specific details. In other instances, well-known structures and devices are shown in block diagram form in order to avoid unnecessarily obscuring the present invention.

0014Embodiments are described herein according to the following outline: <ul id="ul0001" list-style="none"><li id="ul0001-0001" num="0000"><ul id="ul0002" list-style="none"><li id="ul0002-0001" num="0015">1.0. General Overview</li><li id="ul0002-0002" num="0016">2.0. Functional Overview</li><li id="ul0002-0003" num="0017">3.0. Determining A Coupon Value <ul id="ul0003" list-style="none"><li id="ul0003-0001" num="0018">3.1. Example Equation</li><li id="ul0003-0002" num="0019">3.2. Redemption Rate Function</li></ul></li><li id="ul0002-0004" num="0020">4.0. Implementation Mechanism—Hardware Overview</li><li id="ul0002-0005" num="0021">5.0. Extensions and Alternatives</li></ul></li></ul>

1.0. General Overview

0022Techniques are disclosed for determining a value for a coupon. In this context, a “coupon campaign” is initiated by a coupon provider and involves the distribution, by a coupon distributor, of a particular coupon (or set of coupons) regarding, for example, a product or set of products. Typically, a coupon campaign lasts for a certain period of time. For example, many coupons are valid for a limited period of time, such as a few months, and end on a specific date.

0023The greater the value of a coupon for a coupon campaign, the more likely the coupon will be printed and, ultimately, redeemed. Also, the more a product or service is purchased, the greater the chance that customer loyalty in that product or service increases, ensuring future purchases. However, with more coupon redemptions, a coupon provider effectively trades purchases of its products or services for lower profit margins or even negative margins. Nevertheless, for the coupon provider, a sale at a discounted price is typically better than no sale at all.

0024Conversely, the lower the value of a coupon for a coupon campaign, the less likely the coupon will be printed and redeemed. Thus, for example, it might take longer for a $1 coupon to be redeemed a certain number of times relative to a $1.50 coupon for the same product or service. However, coupon providers typically desire to “move” or sell a certain number of products during a particular time period. Thus, the value for a coupon that encourages the sale of that number of products without causing an over sale of the product using the coupon is important.

0025Many times, a coupon provider does not have enough knowledge regarding how many coupons will be redeemed given a certain coupon value. This lack of knowledge carries a cost because the coupon provider could have diverted some of its resources that are used to initiate and fund a coupon campaign elsewhere or could have increased the coupon value slightly with a significantly higher redemption rate. The following table illustrates how two different hypothetical coupon campaigns for the same product can yield very different results, depending on the coupon value.

0000<tables id="TABLE-US-00001" num="00001"><table frame="none" colsep="0" rowsep="0"><tgroup align="left" colsep="0" rowsep="0" cols="6"><colspec colname="1" colwidth="35pt" align="center" /><colspec colname="2" colwidth="28pt" align="center" /><colspec colname="3" colwidth="21pt" align="left" /><colspec colname="4" colwidth="35pt" align="center" /><colspec colname="5" colwidth="49pt" align="center" /><colspec colname="6" colwidth="49pt" align="center" /><thead><row><entry namest="1" nameend="6" rowsep="1">TABLE A</entry></row><row><entry namest="1" nameend="6" align="center" rowsep="1" /></row><row><entry>Coupon</entry><entry>Coupon</entry><entry /><entry>Redemp-</entry><entry>Cost to</entry><entry>Revenue to</entry></row><row><entry>Campaign</entry><entry>Value</entry><entry>Prints</entry><entry>tions</entry><entry>Provider</entry><entry>Distributor</entry></row><row><entry namest="1" nameend="6" align="center" rowsep="1" /></row></thead><tbody valign="top"><row><entry /></row></tbody></tgroup><tgroup align="left" colsep="0" rowsep="0" cols="6"><colspec colname="1" colwidth="35pt" align="center" /><colspec colname="2" colwidth="28pt" align="char" char="." /><colspec colname="3" colwidth="21pt" align="center" /><colspec colname="4" colwidth="35pt" align="char" char="." /><colspec colname="5" colwidth="49pt" align="center" /><colspec colname="6" colwidth="49pt" align="center" /><tbody valign="top"><row><entry>A</entry><entry>$1.00</entry><entry>100</entry><entry>20</entry><entry>$20 + $10 = $30</entry><entry>100*$0.10 = $10</entry></row><row><entry>B</entry><entry>$0.50</entry><entry>150</entry><entry>20</entry><entry>$10 + $15 = $25</entry><entry> 150*$010 = $15</entry></row><row><entry namest="1" nameend="6" align="center" rowsep="1" /></row></tbody></tgroup></table></tables>

0026In both coupon campaigns, a coupon distributor charges $0.10 for each print of a coupon by a potential customer. According to coupon campaign A, the coupon value is $1.00, potential customers or end-users printed <b>100</b> coupons, and 20 of the printed coupons were redeemed. The cost to the coupon provider is the number of redemptions times the coupon value (i.e., 20*$1.00 in this scenario) plus the number of prints times the charge per print (i.e., 100*$0.10). According to coupon campaign B, the coupon value is $0.50, potential customers or end-users printed <b>150</b> coupons, and 20 of the printed coupons were redeemed. Again, the cost to the coupon provider is the number of redemptions times the coupon value (i.e., 20*$0.50 in this scenario) plus the number of prints times the charge per print (i.e., 150*$0.10). For both the coupon provider and the coupon distributor, coupon campaign B is preferable to coupon campaign A (although coupon campaign B may have taken longer to run relative to coupon campaign A in order to reach 150 prints). Relative to coupon campaign A, running coupon campaign B instead allows the coupon provider to save $5 and the coupon distributor to increase its profit by $5. However, for each coupon campaign, the coupon provider must guess at what the most appropriate coupon value should be. In an embodiment, a coupon distributor leverages its knowledge of previous redemption rates given certain coupon values to propose a coupon value to a coupon provider, such as a product manufacturer or service provider. According to an embodiment, a coupon distributor receives, from a coupon provider (or prospective coupon provider), one or both of (1) budget data that indicates an amount for allocating to a proposed coupon campaign and (2) redemption data that indicates a number of anticipated redemptions of the corresponding coupon (i.e., that is part of the proposed coupon campaign). The coupon distributor uses this data and historical data (that indicates a relationship between actual coupon values and their corresponding redemption rates during previous coupon campaigns) to determine whether to accept the proposed coupon campaign and, if so, what value to price the coupon.

0027Such an approach to negotiating terms of a coupon campaign is fundamentally different than the prior approach where the coupon provider dictates what the coupon value will be and might negotiate on what the coupon distributor will charge per printed coupon. In contrast, in approaches described herein, the coupon distributor determines the coupon value while the coupon provider dictates an overall budget it will pay for the coupon campaign and/or a redemption rate for the coupon(s) of the proposed coupon campaign.

0028Also, in the prior approach, the coupon provider takes on the risks associated with a coupon campaign. The coupon provider essentially hopes that the coupon value chosen causes a certain number of products to be moved. Because the coupon distributor is paid per print and stops a campaign when a certain number of coupons are printed, the coupon distributor takes relatively little risk in ensuring the success of the campaign. In contrast, in approaches described herein, the coupon distributor assumes much of the risks associated with a coupon campaign. The coupon provider has a budget and may dictate a target redemption rate while the coupon distributor must ensure that the target redemption rate is met or else the coupon distributor might lose money on (and possibly credibility with respect to) the coupon campaign. The coupon distributor is willing to take that risk due to stored information about coupon values and redemption rates associated with prior campaigns.

0029Although embodiments are applicable to coupons for services, for purposes of brevity, the following description refers only to coupons for products. Also, “coupon provider” refers to an entity (such as a manufacturer of a product or a service provider) that seeks to have one or more coupons for its product to be distributed to potential customers. In an embodiment, a third-party entity or agency represents a manufacturer and acts on their behalf. Thus, such an agency may be viewed as a coupon provider, at least from the perspective of the coupon distributor.

2.0. Functional Overview

0030<figref idref="DRAWINGS">FIG. 1</figref> is a flow diagram that depicts a process for determining a value for a coupon, according to an embodiment. In an embodiment, process steps may be performed by one or more devices operating on behalf of a coupon distributor.

0031In the example process <b>100</b> of <figref idref="DRAWINGS">FIG. 1</figref>, at block <b>110</b>, the coupon distributor receives budget data that indicates an amount that a coupon provider is willing to pay the coupon distributor for handling a proposed coupon campaign.

0032At block <b>120</b>, the coupon distributor also receives redemption data that indicates a target redemption rate of a coupon (or set of coupons) in the proposed coupon campaign. The redemption rate may refer to a number of redemptions of a coupon. The redemption data may indicate a single value (for example, 1000) or a range of values (for example, 950-1050). Although depicted as occurring after block <b>110</b>, block <b>120</b> might occur before or concurrently with block <b>110</b>.

0033At block <b>130</b>, the coupon distributor determines whether it will accept the proposed coupon campaign based on the budget data and redemption data. If so, then, at block <b>140</b>, the coupon distributor sends, to the coupon provider, data that indicates that the proposed coupon campaign is accepted. The coupon distributor begins the proposed coupon campaign according to one or more details of the proposal. The coupon distributor may accept a proposed coupon campaign even though the coupon distributor anticipates that it may make very little or no profit on the proposed coupon campaign. The coupon distributor may do this in order to establish a relationship with a particular coupon provider that turns into future business with that provider.

0034If, at block <b>130</b>, the coupon distributor determines that it will not accept the proposed coupon campaign, then, at block <b>150</b>, the coupon distributor informs the coupon provider as much. Such a determination might be made if the coupon distributor predicts that there is no coupon value that would allow the coupon distributor to make a profit based on the budget data while ensuring that the proposed redemption rate is likely to be met (for example, within a certain margin of error).

0035At block <b>160</b> (or as part of block <b>150</b>), the coupon distributor determines a different budget and/or different redemption rate that the coupon distributor will accept. The coupon distributor also provides that data to the coupon provider. For example, if the coupon distributor determines that no coupon value will allow the coupon distributor to stay within the budget and still hit the redemption rate target, then the coupon distributor might calculate a coupon value with a different (for example, increased) budget value and/or with a different (for example, reduced) target redemption rate.

0036At block <b>170</b>, the coupon distributor receives data that indicates whether the coupon provider accepts the terms of the updated proposed coupon campaign, i.e., including a different budget and/or redemption rate.

0037At block <b>180</b>, the coupon distributor determines whether the coupon provider accepts the updated proposal. If so, then process <b>100</b> proceeds to block <b>140</b> where the coupon distributor sends, to the coupon provider, an acknowledgement that the coupon distributor will execute the proposed coupon campaign according to the agreed upon budget and the agreed upon redemption rate. If not, then process <b>100</b> may proceed to block <b>160</b> where the coupon distributor again determines a different budget and/or redemption rate. Although not depicted in <figref idref="DRAWINGS">FIG. 1</figref>, process <b>100</b> may end after one or more negative determinations at block <b>180</b> if no agreement is reached.

0038Submitting terms of a proposed coupon campaign to a coupon distributor may be carried out in multiple ways. In an embodiment, the coupon distributor maintains a web service that coupon providers may access over the Internet, that receives one or more terms of a proposed coupon campaign, and that responds with an affirmative or negative indication that the proposed coupon campaign is accepted. For example, a representative of the coupon provider directs a web browser (executing on a device operated by the representative) to a particular URL of the coupon distributor to display a corresponding web page. The representative enters the budget data and redemption data into the web page. The representative provides input that triggers the sending of the budget data and redemption data (for example, using HTTP) from the representative's device over a network to a server device operated by the coupon distributor. Thus, blocks <b>110</b> and <b>120</b> may involve the server device receiving the budget data and redemption data as input. Also, block <b>130</b> may involve the server device (or one or more other devices) calculating a coupon value based on the input.

0039In a related example, instead of a web page, the representative selects a software application that executes on the representative's device and that is dedicated to performing the functions of accepting input that reflects the terms of the proposed coupon campaign and indicating whether the coupon distributor will accept the proposed coupon campaign based on the terms. The software application may make the determination of whether to accept the coupon campaign or may communicate the terms of the proposed coupon campaign to a remote server that makes the determination. Alternatively, embodiments may use special-purpose computers configured with logic that performs functionally equivalent tasks and services.

0040In an embodiment, the coupon distributor allows a coupon provider to select one of multiple payment models to pay the coupon distributor for a proposed coupon campaign. One payment model is a print-based model in which the coupon provider pays the coupon distributor a fixed amount for each print of the provider's coupon by a potential customer. Another payment model described herein is target-based model in which the coupon provider indicates a budget (for example, a total dollar amount) and/or a target redemption rate (for example, between 400 and 420).

0041In an alternative embodiment, a human representative of a coupon provider verbally provides (for example, over the phone or in person) the budget data and/or redemption data to a human representative of a coupon distributor who enters the data into a device. That device and/or one or more other devices use the entered data to determine whether to accept a coupon campaign and, if so, what the coupon value should be.

3.0. Determining a Coupon Value

0042Embodiments are not limited to any particular technique for determining a coupon value. Certain embodiments may use programmed software, special-purpose computers, or other logic to implement algorithms, computations or other operations that may be expressed herein, for purposes of clarity and compactness, as equations. An equation that is used to calculate a coupon value for a proposed coupon campaign is referred to herein as a “coupon value equation.” A coupon value equation takes into account how coupon values in previous coupon campaigns correlated with the redemption rates in those campaigns. The previous coupon campaigns may have been for the same product, different products, or even different product categories.

0043In an embodiment, the coupon value equation also takes into account a budget for the proposed coupon campaign. The greater the budget, the greater the likelihood that a coupon distributor can make a profit from executing the proposed coupon campaign. Conversely, if the budget is so low that no possible coupon value would allow the coupon distributor to make a profit, then the campaign distributor should not accept the proposed coupon campaign and, optionally, suggest a higher budget to the coupon manufacturer. The proposed budget may or may not be established by the coupon provider. For example, the coupon provider might only provide a redemption rate to the coupon distributor and the coupon distributor predicts, based on the redemption rate, a budget that will allow the coupon distributor to make a profit.

0044In an embodiment, the coupon value equation also takes into account an anticipated (or hoped for) redemption rate for the proposed coupon campaign. The anticipated redemption rate may or may not be established by the coupon provider. For example, the coupon provider might only provide a proposed budget to the coupon distributor and the coupon distributor predicts, based on the proposed budget, a redemption rate that will allow the coupon distributor to make a profit.

00453.1 Example Equation

0046The following is an example equation the may be used to calculate a value of a coupon:

0000<maths id="MATH-US-00001" num="00001"><math overflow="scroll"><mtable><mtr><mtd><mrow><mi>F</mi><mo>=</mo><mrow><munder><mrow><mi>arg</mi><mo></mo><mstyle><mspace width="0.3em" height="0.3ex" /></mstyle><mo></mo><mi>max</mi></mrow><mi>V</mi></munder><mo></mo><mrow><mo>{</mo><mrow><mrow><mrow><mi>w</mi><mo></mo><mrow><mo>(</mo><mrow><mi>R</mi><mo>-</mo><msub><mi>R</mi><mi>min</mi></msub></mrow><mo>)</mo></mrow></mrow><mo></mo><mrow><mo>(</mo><mrow><msub><mi>R</mi><mi>max</mi></msub><mo>-</mo><mi>R</mi></mrow><mo>)</mo></mrow></mrow><mo>+</mo><mrow><mrow><mo>(</mo><mrow><mn>1</mn><mo>-</mo><mi>w</mi></mrow><mo>)</mo></mrow><mo></mo><mrow><mo>(</mo><mrow><mi>B</mi><mo>-</mo><mrow><mi>R</mi><mo></mo><mrow><mo>(</mo><mrow><mi>V</mi><mo>+</mo><msub><mi>α</mi><mn>1</mn></msub></mrow><mo>)</mo></mrow></mrow><mo>-</mo><mi>FixedCost</mi></mrow><mo>)</mo></mrow></mrow></mrow><mo>}</mo></mrow></mrow></mrow></mtd><mtd><mrow><mi>EQUATION</mi><mo></mo><mstyle><mspace width="0.8em" height="0.8ex" /></mstyle><mo></mo><mi>A</mi></mrow></mtd></mtr></mtable></math></maths>

0047The variables in Equation A are as follows: V is a possible coupon value, R is a historical redemption rate for a coupon with value V, B is the budget data, R_min is a minimum redemption rate, R_max is a maximum redemption rate, w is a weight, α₁is a fixed cost per coupon, FixedCost represents a fixed cost for running the proposed coupon campaign. The value of V that maximizes the value of F may be used as the value of the coupon.

0048As noted above, a coupon provider may specify a single value for redemption rate or may specify multiple values, for example, representing a minimum and a maximum. If the coupon provider provides a single value representing a redemption rate, then the coupon distributor might calculate R_maxand R_minbased on that value. For example, the coupon distributor might always identify an R_maxthat is 10% greater than the specified value and identify an R_min, that is 10% less than the specified value.

0049The value of α₁may stay the same across multiple coupon campaigns and/or may fluctuate from one coupon campaign to another. One possible value of α is $0.08, which reflects a typical amount charged per coupon by a coupon clearinghouse. Thus, in embodiments described herein, the coupon distributor is responsible for paying a coupon clearinghouse (directly or indirectly) for the number of redemptions whereas, in a prior approach, the coupon provider is so responsible.

0050FixedCosts reflects some fixed cost that may exist for running a coupon campaign. The value of FixedCost may stay the same across multiple coupon campaigns and/or may fluctuate from one coupon campaign to another.

0051Equation A involves two main components or parts. The first part is the expression w(R−R_min)(R_max−R). The second part is the expression (1−w)(B−R(V+α₁)−FixedCosts). The first part of Equation A is negative when the value of R is greater than R_max. The first part is also negative when the value of R is less than R_min. Thus, the first part is positive when R is greater than R_minand less than R_max.

0052The value of w is set by the coupon distributor. The value of w indicates how important it is that the redemption rate R is within bounds indicated or expected by a coupon provider relative to fact that there is money left over from the budget after all costs are taken into account. Thus, if w is 0, then the first part of Equation A is given no weight. Conversely, if w is 1, then the first part of Equation is given all the weight and the second part of Equation A has no bearing on the value of F. If the w is 0.5 or there is no w in Equation A, then the first and second parts are considered equal in importance.

0053Evaluation of the second part of Equation A indicates the revenue that the coupon distributor might make. In other words, the second part reflects the amount left over (if any) from the budget after the redemption rate times the sum of the coupon value and fixed costs per coupon, which is modeled as α₁. The remaining value is multiplied by the remainder (i.e., 1−w) of the weight w that is not applied to the first part of Equation A.

0054If a coupon provider only provides redemption rate data (for example, R_minand R_maxor a value that is used to derive R_minand R_max) to a coupon distributor, then the coupon distributor might test different values of B and indicate, to the coupon provider, that the coupon distributor is willing to accept the proposed coupon campaign for a certain (reasonable) value of B. One or more devices operated by the coupon distributor might select a value of B in one of many ways. For example, one or more initial values of B might be tested where each of the values will probably or likely allow the coupon distributor to make a profit. Then, progressively lower values of B are automatically tested until a particular value of B that will probably or likely not allow the coupon distributor to make a profit is encountered. The particular value of B is then provided to the coupon distributor (for example, electronically from one device to another or orally between human representatives).

0055Conversely, one or more values of B might be tested where each of the values will probably or likely not allow the coupon distributor to make a profit. Then, progressively higher values of B are automatically tested until a particular value of B that will probably or likely allow the coupon distributor to make a profit is discovered.

0056In either scenario, the coupon distributor then provides the particular value of B to the coupon distributor as an offer to run the proposed coupon campaign in exchange for the particular value. The coupon distributor is given the choice to accept or reject the offer.

0057In an embodiment, instead of providing redemption rate data, a coupon provider only provides budget data to a coupon distributor. The coupon distributor might test different values of R_minand R_maxand eventually indicate, to the coupon provider, that the coupon distributor is willing to accept the proposed coupon campaign provided that the coupon provider is satisfied with a redemption rate that falls within a certain range.

3.2 REDEMPTION RATE FUNCTION

0059Typically, a greater coupon value correlates with a greater redemption rate. Conversely, a lower coupon value typically correlates with a lower redemption rate. Because the value of a coupon impacts the redemption rate of that coupon, the redemption rate R may be viewed as a function of coupon value V. A function that accepts a coupon value as input and is used to calculate a redemption rate based on the coupon value is referred to herein as “f(V)”. Thus, in Equation A, R may be replaced with f(V), which causes Equation A to be as follows:

0000<maths id="MATH-US-00002" num="00002"><math overflow="scroll"><mrow><mi>F</mi><mo>=</mo><mrow><munder><mrow><mi>arg</mi><mo></mo><mstyle><mspace width="0.3em" height="0.3ex" /></mstyle><mo></mo><mi>max</mi></mrow><mi>V</mi></munder><mo></mo><mrow><mo>{</mo><mrow><mrow><mrow><mi>w</mi><mo></mo><mrow><mo>(</mo><mrow><mrow><mi>f</mi><mo></mo><mrow><mo>(</mo><mi>V</mi><mo>)</mo></mrow></mrow><mo>-</mo><msub><mi>R</mi><mi>min</mi></msub></mrow><mo>)</mo></mrow></mrow><mo></mo><mrow><mo>(</mo><mrow><msub><mi>R</mi><mi>max</mi></msub><mo>-</mo><mrow><mi>f</mi><mo></mo><mrow><mo>(</mo><mi>V</mi><mo>)</mo></mrow></mrow></mrow><mo>)</mo></mrow></mrow><mo>+</mo><mrow><mrow><mo>(</mo><mrow><mn>1</mn><mo>-</mo><mi>w</mi></mrow><mo>)</mo></mrow><mo></mo><mrow><mo>(</mo><mrow><mi>B</mi><mo>-</mo><mrow><mrow><mi>f</mi><mo></mo><mrow><mo>(</mo><mi>V</mi><mo>)</mo></mrow></mrow><mo></mo><mrow><mo>(</mo><mrow><mi>V</mi><mo>+</mo><msub><mi>α</mi><mn>1</mn></msub></mrow><mo>)</mo></mrow></mrow><mo>-</mo><mi>FixedCost</mi></mrow><mo>)</mo></mrow></mrow></mrow><mo>}</mo></mrow></mrow></mrow></math></maths>

0060In an embodiment, f(V) is based on historical data regarding previously completed coupon campaigns. For example, for a particular product, a coupon distributor stores first historical data that indicates the redemption rate of a first coupon with a first coupon value during a first coupon campaign and second historical data that indicates the redemption rate of a second coupon with a second coupon value during a second coupon campaign. With these two data points, the coupon distributor determines a function that represents the relationship between the coupon value and the redemption rate. With only two data points, f(V) may be a simple line (for example, f(V)=200V−100). If the coupon distributor has more than two data points, then f(V) may be a more complex (for example, quadratic) function.

0061In an embodiment, f(V) is generated prior to receiving details of a proposed coupon campaign, where those details are used to select a f(V). In an alternative embodiment, a f(V) that is used to compute a coupon value for a proposed coupon campaign is generated “on-the-fly”, i.e., after receiving details of the proposed coupon campaign. If f(V) is modeled as a linear function, then the above equation becomes a quadratic optimization function, which in turn may be solved by a non-linear optimization method to yield an optimal value of V.

0062In an embodiment, a coupon distributor maintains multiple f(V) redemption rate functions (referred to herein as “redemption rate function f<b>1</b>(V)”, “redemption rate function f<b>2</b>(V)”, and so forth). In other words, a different redemption rate function f(V) may be used for determining a coupon value for different proposed coupon campaigns. For example, redemption rate function f<b>1</b>(V) may be used to determine a coupon value for one product and redemption rate function f<b>2</b>(V) may be used to determine a coupon value for a different product. A different redemption rate function f(V) may exist for different products because customers typically have different price sensitivities to different products.

0063As another example, redemption rate function f<b>1</b>(V) may be used to determine a coupon value for a particular product at one time (for example, during the summer) and redemption rate function f<b>2</b>(V) may be used to determine a coupon value for the same product at a later time (for example, during the winter). Again, a different redemption rate function f(V) may exist for the same product because consumers may have different price sensitivities to the same product at different times of the year or in different years. This phenomenon is referred to as “seasonality.”

0064As another example, redemption rate function f<b>1</b>(V) may be used to determine a coupon value for a particular product where the proposed coupon campaign targets a certain region of the country (for example, the Southwest) and redemption rate function f<b>2</b>(V) may be used to determine a coupon value for the same product where the proposed coupon campaign targets another region of the country (for example, the Northeast). Again, a different redemption rate function f(V) may exist for the same product because consumers in different parts of the country may have different price sensitivities to the same product. This phenomenon is referred to as “regionality.”

0065If a product of a proposed coupon campaign is new (for example, not subject of a previous coupon campaigns, at least not one run by the coupon distributor), then the coupon distributor might rely on a redemption rate function f(V) that is based on one or more previous coupon campaigns for one or more other products made by the same manufacturer. As an example, if the product of the proposed coupon campaign is canned tomatoes, then a redemption rate function f(V) that is based on the one or more previous coupon campaigns from the same manufacturer regarding canned corn and/or canned green beans may be used.

0066Alternatively, the coupon distributor might rely on a redemption rate function f(V) that is based on one or more previous campaigns for one or more products that belong to a particular product category to which the specific product also belongs. As an example, if the product of the proposed coupon campaign is for a certain brand of diapers, then a redemption rate function f(V) that is based on one or more previous diaper coupon campaigns may exist, even though the one or more previous diaper coupon campaigns were for diapers from different manufacturers. Some manufacturers are associated with multiple brands instead of only a single brand. In such cases, a coupon distributor might maintain a different redemption rate function f(V) for each brand of multiple brands, even though the multiple brands may originate from the same manufacturer. A “brand” is a name, term, design, symbol, or any other feature that identifies one seller's product as distinct from products of other sellers. A brand may identify one item, a family of items, or all items of that seller (for example, Great Value). A typical grocery store carries or sells hundreds of brands, some of which might include General Mills, Betty Crocker, Kelloggs, Quaker, and V<b>8</b>.

0067A “product category” refers to a type of product, such as cereal, laundry detergent, diapers, and canned tomatoes. Some product categories are subsets of other product categories. For example, a canned peaches product category is a subset of a canned fruit product category, which is a subset of a canned goods category. Thus, a coupon distributor may generate a different redemption rate function f(V) for each of multiple product categories, regardless of the number of different brands reflected in each product category.

0068In an embodiment, in response to receiving details of a proposed coupon campaign, one or more of those details are used to select a f(V) among a plurality of f(V)s. The f(V) that is based on attributes that match or most closely match those of the proposed coupon campaign is used to determine a redemption rate given a certain coupon value V. The following is an example of a number of different f(V)s from which a single f(V) may be selected:

0069(a) If C<b>1</b>=Breakfast and C<b>2</b>=Cereal, then f(V)=0.1+3V

0070(b) If C<b>1</b>=Breakfast and C<b>2</b>=Oatmeal, then f(V)=0.3+2V

0071(c) If C<b>1</b>=Dinners and C<b>2</b>=Frozen, then f(V)=3+0.1V

0072(d) If C<b>1</b>=Dinners and C<b>2</b>=Fresh, then f(V)=2+3V

0073(e) If C<b>1</b>=Breakfast, then f(V)=0.2+1.8V

0074(f) If C<b>1</b>=Dinners, then f(V)=2.8+2.7V.

0075Given these f(V)s, if a proposed coupon campaign is for a breakfast item and the breakfast item is cereal, then (a) (i.e., f(V)=0.1+3V) is used to compute a redemption rate given a particular value V. If a proposed coupon campaign is for a breakfast item that is not or cannot be classified into one of the four enumerated breakfast categories above (i.e., cereal, oatmeal, frozen, and fresh), then (e) (i.e., f(V)=0.2+1.8V) is used to compute a redemption rate given a particular value V.

0076As can be appreciated, given the number of attributes of a proposed coupon campaign, tens, hundreds, or even thousands of f(V)s may be computed. Each f(V) may be represented in a table or other database object that stores information about the attributes of the coupon campaigns upon which the f(V) is based. Non-limiting examples of attributes may comprise the specific product, the brand, the manufacturer, the coupon provider, the coupon value, the percentage discount, one or more product categories to which the product belongs, the time of year of the campaign, and geographic location of the campaign.

0077In an embodiment, the attribute values of a plurality of f(V)s are indexed such that, given a particular attribute value, one or more f(V)s may be identified based on the particular attribute value. In this way, one or more attributes of each f(V) stored in memory or on disk do not have to be scanned. For example, in response to receiving details of a proposed coupon campaign, the brand of the proposed coupon campaign is identified. An index that is generated based on brand is used to identify one or more f(V)s that are generated based on one or more previous coupon campaigns that involved that brand. If a set of multiple f(V)s are identified using the index, then one or more other attributes of the proposed coupon campaign may be used to select a particular f(V) from that set. Continuing with the example, if three f(V)s that each correspond to the brand are identified, then, for example, the product category and percentage discount of the proposed coupon campaign might be used to select one of the three f(V)s.

0078As noted above, a coupon distributor may generate a redemption rate function f(V) based on data from a single previous coupon campaign or multiple previous coupon campaigns. If a redemption rate function f(V) is based on multiple previous coupon campaigns, then those previous coupon campaigns may have been for the same product, for different products in the same product category, or for different products of the same brand or manufacturer but in different product categories.

0079In the case where a f(V) is based on data from multiple previous coupon campaigns, two or more of the previous coupon campaigns may be “incongruous” with respect to each other. An set of “incongruous” coupon campaigns are campaigns that differ on a relevant attribute, such as brand, product, product category, seasonality, coupon value, percentage discount, and geographic target. Thus, for example, two previous coupon campaigns could have been for the same product (and, thus, for the same brand), the same coupon value, the same geographic target, but for different times of the year, such as winter and summer. From these two previous coupon campaigns, two f(V)s may be generated: one that can be used for future winter campaigns and one that can be used for future summer campaigns. The “winter” f(V) may be generated by weighting the results of the “winter” campaign greater than the results of the “summer” campaign. Conversely, the “summer” f(V) may be generated by weighting the results of the “summer” campaign greater than the results of the “winter” campaign. Later, when a computing device of the coupon distributor receives a proposed coupon campaign, the computing device might determine the season (or time of year) in which the proposed campaign is to run and use that determination to select either the “winter” f(V) or the “summer” f(V).

0080As another example, a coupon distributor may generate and use an f(V) that is based on a first set of one or more previous coupon campaigns for a particular product that is subject of a particular proposed coupon campaign, and a second set of one or more previous coupon campaigns for different products, which may be for products in the same product category as the particular product and/or for products from the same manufacturer or brand. Such an f(V) may be generated because there may be few (for example, only one) previous campaign for the particular product while there may be many previous campaigns for similar products. In generating such an f(V), the results of the first set of previous campaign(s) may be given more weight relative to the weight given to the results of the second set of previous campaign(s) to reflect the fact that the first set of previous campaign(s) should be more predictive (of future redemption rates given certain coupon values) than the second set of previous campaign(s).

0081As noted herein, there are multiple attributes or characteristics, of a completed coupon campaign, that can be used to generate an f(V). Such attributes might be categorized into four main groups: Provider and Coupon Data, User Data, Industry Data, and External Data. Examples of Provider and Coupon Data include history and information about the coupon provider (or manufacturer if the coupon provider and the manufacturer are different), the brand, the specific product, the product category, and percentage discount, each of which is described above. Examples of User Data include (1) history about how this offer and/or similar offers (i.e., in other campaigns) performed regarding prints and redemptions for known users and (2) demographic information about such users. Examples of Industry Data include information about similar campaigns regarding the same or similar product category and their respective performance history. Examples of External Data include information about the overall population of consumers and how they consume the product or similar products, such as purchase frequency, average price, buyers by geographic location (described herein), and seasonality (also described herein).

4.0. Implementation Mechanism—Hardware Overview

0082According to one embodiment, the techniques described herein are implemented by one or more special-purpose computing devices. The special-purpose computing devices may be hard-wired to perform the techniques, or may include digital electronic devices such as one or more application-specific integrated circuits (ASICs) or field programmable gate arrays (FPGAs) that are persistently programmed to perform the techniques, or may include one or more general purpose hardware processors programmed to perform the techniques pursuant to program instructions in firmware, memory, other storage, or a combination. Such special-purpose computing devices may also combine custom hard-wired logic, ASICs, or FPGAs with custom programming to accomplish the techniques. The special-purpose computing devices may be desktop computer systems, portable computer systems, handheld devices, networking devices or any other device that incorporates hard-wired and/or program logic to implement the techniques.

0083For example, <figref idref="DRAWINGS">FIG. 2</figref> is a block diagram that illustrates a computer system <b>200</b>. Computer system <b>200</b> includes a bus <b>202</b> or other communication mechanism for communicating information, and a hardware processor <b>204</b> coupled with bus <b>202</b> for processing information. Hardware processor <b>204</b> may be, for example, a general purpose microprocessor.

0084Computer system <b>200</b> also includes a main memory <b>206</b>, such as a random access memory (RAM) or other dynamic storage device, coupled to bus <b>202</b> for storing information and instructions to be executed by processor <b>204</b>. Main memory <b>206</b> also may be used for storing temporary variables or other intermediate information during execution of instructions to be executed by processor <b>204</b>. Such instructions, when stored in non-transitory storage media accessible to processor <b>204</b>, render computer system <b>200</b> into a special-purpose machine that is customized to perform the operations specified in the instructions.

0085Computer system <b>200</b> further includes a read only memory (ROM) <b>208</b> or other static storage device coupled to bus <b>202</b> for storing static information and instructions for processor <b>204</b>. A storage device <b>210</b>, such as a magnetic disk or optical disk, is provided and coupled to bus <b>202</b> for storing information and instructions.

0086Computer system <b>200</b> may be coupled via bus <b>202</b> to a display <b>212</b>, such as a cathode ray tube (CRT), for displaying information to a computer user. An input device <b>214</b>, including alphanumeric and other keys, is coupled to bus <b>202</b> for communicating information and command selections to processor <b>204</b>. Another type of user input device is cursor control <b>216</b>, such as a mouse, a trackball, or cursor direction keys for communicating direction information and command selections to processor <b>204</b> and for controlling cursor movement on display <b>212</b>. This input device typically has two degrees of freedom in two axes, a first axis (for example, x) and a second axis (for example, y), that allows the device to specify positions in a plane.

0087Computer system <b>200</b> may implement the techniques described herein using customized hard-wired logic, one or more ASICs or FPGAs, firmware and/or program logic which in combination with the computer system causes or programs computer system <b>200</b> to be a special-purpose machine. According to one embodiment, the techniques herein are performed by computer system <b>200</b> in response to processor <b>204</b> executing one or more sequences of one or more instructions contained in main memory <b>206</b>. Such instructions may be read into main memory <b>206</b> from another storage medium, such as storage device <b>210</b>. Execution of the sequences of instructions contained in main memory <b>206</b> causes processor <b>204</b> to perform the process blocks described herein. In alternative embodiments, hard-wired circuitry may be used in place of or in combination with software instructions.

0088The term “storage media” as used herein refers to any non-transitory media that store data and/or instructions that cause a machine to operation in a specific fashion. Such storage media may comprise non-volatile media and/or volatile media. Non-volatile media includes, for example, optical or magnetic disks, such as storage device <b>210</b>. Volatile media includes dynamic memory, such as main memory <b>206</b>. Common forms of storage media include, for example, a floppy disk, a flexible disk, hard disk, solid state drive, magnetic tape, or any other magnetic data storage medium, a CD-ROM, any other optical data storage medium, any physical medium with patterns of holes, a RAM, a PROM, and EPROM, a FLASH-EPROM, NVRAM, any other memory chip or cartridge.

0089Storage media is distinct from but may be used in conjunction with transmission media. Transmission media participates in transferring information between storage media. For example, transmission media includes coaxial cables, copper wire and fiber optics, including the wires that comprise bus <b>202</b>. Transmission media can also take the form of acoustic or light waves, such as those generated during radio-wave and infra-red data communications.

0090Various forms of media may be involved in carrying one or more sequences of one or more instructions to processor <b>204</b> for execution. For example, the instructions may initially be carried on a magnetic disk or solid state drive of a remote computer. The remote computer can load the instructions into its dynamic memory and send the instructions over a telephone line using a modem. A modem local to computer system <b>200</b> can receive the data on the telephone line and use an infra-red transmitter to convert the data to an infra-red signal. An infra-red detector can receive the data carried in the infra-red signal and appropriate circuitry can place the data on bus <b>202</b>. Bus <b>202</b> carries the data to main memory <b>206</b>, from which processor <b>204</b> retrieves and executes the instructions. The instructions received by main memory <b>206</b> may optionally be stored on storage device <b>210</b> either before or after execution by processor <b>204</b>.

0091Computer system <b>200</b> also includes a communication interface <b>218</b> coupled to bus <b>202</b>. Communication interface <b>218</b> provides a two-way data communication coupling to a network link <b>220</b> that is connected to a local network <b>222</b>. For example, communication interface <b>218</b> may be an integrated services digital network (ISDN) card, cable modem, satellite modem, or a modem to provide a data communication connection to a corresponding type of telephone line. As another example, communication interface <b>218</b> may be a local area network (LAN) card to provide a data communication connection to a compatible LAN. Wireless links may also be implemented. In any such implementation, communication interface <b>218</b> sends and receives electrical, electromagnetic or optical signals that carry digital data streams representing various types of information.

0092Network link <b>220</b> typically provides data communication through one or more networks to other data devices. For example, network link <b>220</b> may provide a connection through local network <b>222</b> to a host computer <b>224</b> or to data equipment operated by an Internet Service Provider (ISP) <b>226</b>. ISP <b>226</b> in turn provides data communication services through the world wide packet data communication network now commonly referred to as the “Internet” <b>228</b>. Local network <b>222</b> and Internet <b>228</b> both use electrical, electromagnetic or optical signals that carry digital data streams. The signals through the various networks and the signals on network link <b>220</b> and through communication interface <b>218</b>, which carry the digital data to and from computer system <b>200</b>, are example forms of transmission media.

0093Computer system <b>200</b> can send messages and receive data, including program code, through the network(s), network link <b>220</b> and communication interface <b>218</b>. In the Internet example, a server <b>230</b> might transmit a requested code for an application program through Internet <b>228</b>, ISP <b>226</b>, local network <b>222</b> and communication interface <b>218</b>. The received code may be executed by processor <b>204</b> as it is received, and/or stored in storage device <b>210</b>, or other non-volatile storage for later execution.

5.0. Extensions and Alternatives

0094In the foregoing specification, embodiments of the invention have been described with reference to numerous specific details that may vary from implementation to implementation. Thus, the sole and exclusive indicator of what is the invention, and is intended by the applicants to be the invention, is the set of claims that issue from this application, in the specific form in which such claims issue, including any subsequent correction. Any definitions expressly set forth herein for terms contained in such claims shall govern the meaning of such terms as used in the claims. Hence, no limitation, element, property, feature, advantage or attribute that is not expressly recited in a claim should limit the scope of such claim in any way. The specification and drawings are, accordingly, to be regarded in an illustrative rather than a restrictive sense.