Constant Contact (NASDAQ:CTCT) has announced the acquisition of CardStar, a mobile marketing startup which enables businesses to offer loyalty cards and mobile coupons to attract and retain customers.  With this acquisition, Constant Contact is entering the mobile marketing space. CardStar has approximately 2 million users using its mobile apps, which allow them to scan membership and reward cards, as well as discount coupons and store them digitally using the app. CardStar’s offering allows merchants to track consumer behaviour and trends using the data aggregated from its user base. It also allows them to send personalized offers and target marketing messages to its customers. Constant Contact competes with Salesforce.com‘s (NASDAQ:CRM) Radian6 Social Marketing Cloud as well as digital marketing tools by Adobe (NASDAQ:ADBE) and other companies like Eventbrite, iContact and Surveymonkey.
Constant Contact was initially focused on content marketing and focused on email marketing, event marketing and online survey tools. It recently ventured into social media marketing and launched Social Campaigns, which enables small businesses to run social media marketing campaigns on networks like Facebook, Twitter and LinkedIn. By entering the mobile based loyalty marketing space, it aims to offer a complete marketing solution to small businesses.
We expect Constant Contact’s customer base to have reached 500,000 paying users by the end of 2011. We estimate the average number of paying customers to show a steady increase in the coming years.
The new mobile loyalty-based marketing app will be a part of Constant Contact’s content marketing business, which accounts for more than 80% of its $25 Trefis price estimate, which stands nearly 4% below its current market price.Notes: