Ready-to-eat cereal was the most popular category for coupons accessed via mobile applications for the first half of 2010.

Recent research from Kantar Media’s Marx indicating coupons distributed via free-standing inserts (FSI) in newspapers rose 8.4 percent for the 12-month period ending June 30 compared to the year before.

Coupons Inc. has issued new data that shows digital coupons grew 100 percent during the same period.

The data shows that more than $1 billion in digital coupon savings was printed or loaded to a store loyalty card via Coupons.com.

The Coupons.com network has outpaced the growth of coupons distributed in newspapers 10 to 1 in the last year.

Here is the top 10 list of most popular in-application coupons by product category:

1. Ready-to-eat Cereal

2. Yogurt

3. Refrigerated dough

4. Vegetables

5. Lunch meats

6. Dessert items

7. Portable snacks

8. Nutritional snacks

9. Cheese

10. Bottled watter, non-carbonated

Digital coupons’ popularity by state
Georgia tops the list of most active states using digital coupons both via Web browsers and mobile applications, including Grocery iQ and the Coupons.com mobile application, based on the Coupons.com Savings Index.

The Savings Index ranks states based on each state’s total printed coupon savings on Coupons.com and the Coupons.com network in the first half of 2010 relative to its population size.

With an index of 195, Georgia residents are 1.95 times more likely to use digital coupons than the average American.

Tennessee, South Carolina, North Carolina and Utah round out the top five for states using digital coupons via a Web browser.

Oklahoma, Alaska, Missouri and Tennessee round out the top five for states using digital coupons via mobile applications.

The states in the South and Midwest dominate the top ten spots on both lists.

Here is a chart with the top states using digital coupons via mobile applications:

Mobile is digital
Growth of digital couponing is attributed to several key factors, including continued consumer adoption of online printable, save-to-store loyalty card and mobile coupons, as well as increased use of digital coupons by brand marketers, including manufacturers and retailers alike.

Additionally, Internet queries for coupons and related terms increased on search engines, indicative of trends in the consumer vernacular, according to Coupons.com.

Specifically, searches on Google for “printable coupons” increased 67 percent over a year ago.

Consumer interest in savings is expected to continue in better economic times.

Research shows that even if economic conditions improve, eight out of 10 U.S. adults plan to continue to engage in couponing activities.

Data shows that users of digital coupons have higher household incomes and are better educated than users of newspaper coupons and the general population, dispelling the perceived low-brow stigma of couponing.

Apparel & shoes was by far the top category for codes and offers used to save on online purchases.

Retailers should make it easy for consumers to redeem discount codes during check-out via their mobile Web site and applications.

Other top categories include home & garden, toys & hobbies and computers & software.

Rounding out the top 10 list are baby & maternity, electronics & photo, books/music/movies, auto & travel and sports & outdoors.

Mobile coupons showing strong growth
Mobile Commerce Daily’s Dan Butcher interviewed Steven Horowitz, chief technology officer at Coupons.com, Mountain View, CA. Here is what he had to say:

What is the key finding of the study relating to mobile coupons?
Mobile is emerging and currently represents only a small, but growing, part of our business.

For context, keep in mind that tens of millions of coupons are printed or loaded to a loyalty card each month from Coupons.com and our network, so it’s a huge base. Mobile represents the fastest growing segment of our businesses.

In terms of growth of mobile, June 2010 grew 536 percent in the last 6 months in term of actual coupon numbers.

What is the most surprising finding (relating to mobile coupons), and why?
The research shows that popularity of digital coupons is heaviest in the South and the Midwest and that stays the same when you break out usage via Web browser versus mobile apps.

We expected that mobile usage would have been higher in more tech-savvy western and eastern states.

What is driving the growth of mobile couponing?
There are lots of factors, including:

–Increase in number of smart phones, especially in the hands of non-early adopters of technology

–The growing popularity of our mobile apps, especially Grocery iQ shopping list app, which integrates coupon galleries for users to browse and select

–Decline in number of consumers that receive the Sunday newspaper, which has been the number one vehicle for the distribution of coupons for decades.

Consumers are looking for alternative sources for savings like mobile. While, at the same time, other consumers – especially the younger generation – are getting involved in using coupons, when they would never clip from a traditional newspaper.

What advice can you give to brands, agencies and retailers based on your findings?
Consumers are voting with their actions: When given the opportunity, they are browsing and using coupons while on the go. They want to and they like it.

Fewer and fewer consumers want to be tethered to the kitchen table on Sunday morning, and  more and more are take advantaging of the flexibility that mobile offers.

Marketers do their best “to go” where their consumers are.

With increased smart phone penetration, increased consumer comfort with technology, and the simplicity that well-designed mobile apps can offer, marketers need to ensure that mobile is part of their plan.

Final Take
Dan Butcher, associate editor, Mobile Commerce Daily