Coupons.com Sees 192% Increase Over Last Year

Consumers Print Out $57 Million Worth in March; Cereal, Baby Products Top List

By Emily Bryson York

Published: April 07, 2009

CHICAGO (AdAge.com) -- One area where consumers aren't cutting back: coupon usage. Coupons.com reported a 192% increase in the value of coupons printed from its site in March, compared with a year ago. The total value of the coupons was $57 million.

Coupons.com had 6.6 million unique visitors this February, up 29% from 5 million the year before.

"Consumers printed a record amount of savings in March, almost tripling the amount printed last year," Coupons CEO Steven R. Boal said in a statement. "Consumers are using digital coupons to save on virtually everything they spend money on, from food to household essentials to entertainment items. We see no slowdown in sight."

Coupons have been the second-most-visited category on the internet -- behind jobs -- for about a year, said ComScore spokesman Andrew Lippsman. Coupon sites had 28 million unique visitors in February, up 41% from the year before, when they drew 20 million. Coupons.com had the biggest share of the category, with 6.6 million unique visitors, up 29% from 5 million the year before. Eversave.com came in second, with 5.5 million unique visitors in February.

In general, consumers seem to veer toward necessities at Coupons.com. Ready-to-eat cereal was the most popular category for coupon usage, followed by baby products and baking ingredients. Diet aids and yogurt rounded out the top five. Laundry supplies and personal care entered the top 10 in March, while salty and portable snacks fell off the list, after ranking in the top five in February.

Online coupon usage has grown dramatically in the past year and in direct opposition to the faltering economy. Mr. Boal said his business has been growing about 25% every month since the recession began. It's helped that major marketers have pulled spending from newspapers as local papers continue to fold. The company's clients include Johnson & Johnson, General Mills, Kimberly-Clark, Kraft Foods, Clorox, Kroger, Safeway, CVS and Kmart.

Online Coupons Clipping Along

MARCH 12, 2009

Don’t clip—click!

With the recession in full swing, US retail shoppers are looking for ways to save, and are finding deals through online coupons.

Not surprisingly, retailers are finding online coupons effective for bringing customers to their stores.

According to coupon processor Inmar, 13% of online coupons were redeemed in 2008, versus only a 1% redemption rate for print coupons.

Online coupons are growing at a furious pace, too, posting a 140% growth rate over 2007’s previous high. Unfortunately, online coupons represent only 1% of the 2.6 billion coupons offered annually in the US.

comScore data showed that most consumers still get their coupons from paper sources, such as Sunday papers, receipts or in a store. Less than 30% of consumers claimed to go online to find coupons.

What are some best practices for merchants looking to ride the momentum of online couponing?

“First, transparency,” said Coupons.com CEO Steve Boal. “Tell the consumer what they’re getting. Don’t hide the coupon behind a scheme.”

“From a coupon point of view, the most important best practice on the Internet is to treat everybody the same,” added Mr. Boal. “Give all consumers the same value and coupon, except where geography makes a difference. Don’t give different coupons to different people based on things like behavior or demographic data.”

Mr. Boal did recommend changing the message for different audiences, however. In couponing, as almost everywhere else in marketing, targeting matters.

Cutting Costs with Online Coupon Sites

Web sites that offer money-saving discounts are enjoying a resurgence in the current economy, as consumers surf for bargains

by Catherine Holahan

• View Slide Show

Coupons are making a comeback. In the face of rising food prices and a slowing economy, consumers are clipping coupons once again. Only, they don't need scissors and a local newspaper so much as a computer, printer, and maybe a mobile phone.

The number of page views on Web sites that feature money-off coupons for all manner of consumer products surged 38%, to 281 million, in March from a year earlier, compared with 5% for the Internet as a whole, according to comScore (SCOR). Those visitors spent a total of 145 million minutes on the sites, a 37% increase. While the number of new users to coupon sites isn't growing faster than the larger Internet audience, existing coupon site users are certainly becoming more active. "User engagement by deal-seekers appears to be ramping up," says comScore analyst Andrew Lipsman. "As a general rule, something like online coupon site activity would increase as a result of macroeconomic trends."

Traffic Growth

Individual sites say they're detecting increased use. Coupons.com and RetailMeNot.com say they have seen large traffic spikes in the past three months. Visitors to Coupons.com, a decade-old site that lets users print coupons that can be redeemed in stores, grew 35% in the first three months of 2008, compared with the prior quarter, says the site's CEO, Steven Boal. Typically, quarterly growth averages 22% to 23%, he says. Similarly, RetailMeNot says its growth for February, which typically slows after the holiday shopping season, is already back at December levels. "There is definitely an increased use of coupons across the board," says RetailMeNot co-founder Guy King.

Fueling the traffic growth are rapid increases in food prices (BusinessWeek, 5/1/08) and signs of economic slowdown that are damping consumer sentiment and prompting consumers to hunt for bargains. Costs of staples such as rice have surged in recent months, reflecting rising fuel prices and in some cases, limits on exports. Some analysts also blame government policies that provide incentives for farmers to devote more crops to biofuel production (BusinessWeek, 5/1/08).

Bargains Via Computer or Cell Phone

In recognition of the rising demand for bargains and in hopes of luring cash-strapped consumers, retailers are making coupons more readily available online. In April, Coupons.com featured more than 120 coupon offers from the retailers that distribute coupons on its site or use its technology to offer discounts on their own sites, Boal says. Typically, the number is about 100. "Coupons move products off the shelf," he says. "That is their No. 1 job."

Digital coupons typically work in two ways. On Coupons.com, store owners create coupons, with unique serial numbers, that can be printed and redeemed in stores. Coupons can also have unique promotional codes that shoppers can use on e-commerce Web sites to receive discounts on online purchases. RetailMeNot lets users post and share such digital coupons on its site.

Retailers are also relying on wireless technology to capitalize on consumers' bargain-hunting tendencies. According to a recent report by Juniper Research, retailers will send as many as 3 billion mobile coupons to wireless phone users by 2011, resulting in $7 billion in discounts redeemed.

Consumer Pain, Coupon Gain

It hasn't always been a given that consumers would warm to online coupons. After the circulars tucked between newspaper sections began disappearing, coupons began surfacing online. But the time involved in finding coupons and the cost of the ink to print them seemed to negate much of the cents in savings. Coupon sites have taken off as more consumers have become motivated to look for even small discounts to reduce ever-increasing grocery bills.

The commodities price hike has caused everyone from boxed cereal giants General Mills (GIS) and Kellogg (K) to meat producers such as Tyson Foods (TSN) to hike prices. More price increases are to come. After reporting a $5 million loss in its second quarter on Apr. 29, Tyson CEO Richard Bond said prices will continue to rise.

Consumer pain is turning out to be coupon sites' gain. Coupons.com provides retailers with coupon-marketing and -serving technology. The more consumers printing and using their coupons, the more retailers are likely to work with the site. RetailMeNot sells ads on its site through Google (GOOG) and collects commission from the coupon-driven traffic to retailers' Web sites such as Amazon.com (AMZN). "The net effect is that people are trying to get the most of their shopping through coupons," says King.

For a look at the sorts of coupons that are particularly popular right now, check out the BusinessWeek.com slide show.

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.