Coupons, Inc. Buys Newspaper Chains' Online Coupon Venture

by Les Luchter, Wednesday, May 16, 2007 6:00 AM ET
FURTHER CONSOLIDATING ITS POSITION IN the printable online coupon business, Coupons, Inc. has acquired Boodle.com and its parent Consumer Networks LLC from Gannett Co., Tribune Co. and Copley Press. Boodle, which distributes printable coupons from CPG companies and other marketers through more than 550 newspaper sites, has already used Coupons, Inc.'s technology platform for the past four years, and the two firms had recently extended their alliance through 2011.
Coupons, Inc. said it now works with more than 600 brands and also enables 99.5% of all printable online coupons via its network of thousands of Web sites. The Boodle deal also expands Coupons, Inc.'s presence in the local retail coupon arena, a service that Boodle now provides for some 100 newspapers.

"Newspapers deliver almost 90% of the 384 billion coupons distributed each year," noted Steven Boal, CEO of Coupons, Inc. "As consumers shift their media consumption online, newspapers' sites are the natural place for them to turn for savings."

"The combined company will be a more convenient buy for brand marketers planning wide-scale coupon promotions," said James Tenser, principal of Tucson, AZ-based consulting firm VSN Strategies, who noted that the move positions Coupons, Inc. to be the "last pure play standing in the online coupon game" and also as a more formidable competitor against the two giants of the print coupon business--News America's SmartSource and Valassis Communications' ADVO division.

In addition to SmartSource and ADVO, other players in the online coupon space include Landmark Communications' Q Interactive, which runs CoolSavings.com, the number one individual coupon site; Invendo Corp., formerly E-Centives; and Cox Enterprises' Valpak.

Boal said that marketers spend some $6.6 billion on coupons annually, including both the cost of distribution and the revenues lost when coupons are redeemed, and that Coupons, Inc.'s clients are now shifting 10-20% of their budgets online. While the redemption rate from offline coupons is under 1%, he said, the rate for coupons that consumers choose to print from the Web is around 17%.

Some of the 128 current advertisers on Coupons, Inc.'s own stand-alone consumer site, Coupons.com, include 7Up, GE and Cheerios.

Also yesterday, CoolSavings.com said it was now allowing all site visitors full access without requiring registration. Boal pointed out that the printable coupons available at CoolSavings.com also use Coupons Inc.'s technology platform.

In individual coupon sites, CoolSavings.com attracted 5.945 million unique users in April, according to comScore Media Metrix--down 11% from April 2006, while Coupons.com was in third place with 2.979 million unique users, up 30% over a year earlier.