Crazy for coupons: RedPlum, SmartSource join forces

NEW YORK — Consumers always want more, whether it is a thinner, lighter iPad, a faster car or a muffin with more blueberries. The same is true in the world of coupons, where a stumbling national economy caused shoppers to demand more coupons from consumer packaged goods companies.

While the number of coupons issued, the average face value and the overall redemption rate hit new highs last year, the era of the digital coupon has arrived. There perhaps is no better evidence of this than the recent announcement that two of the biggest names in the world of conventional coupon distribution have joined forces on a cross-publishing agreement that would result in the expansion of digital offers on both companies’ websites.

The deal involves Valassis and its RedPlum coupon distribution brand and News America Marketing’s SmartSource coupon distribution brand allowing digital coupons to appear on each others' sites. It is said to greatly expand the offers available to deal-seeking consumers.

The RedPlum and SmartSource names are well-known to shoppers because the collection of coupons contained in their branded products often fall out of the Sunday newspaper at the same time. They also operate websites where consumes can sign up to receive coupons based on their interests. RedPlum operates Redplum.com and Save.com, while News America has its SmartSource.com site.

“This is a unique relationship that will result in a significant increase in the number of coupons available to shoppers on both sties,” said John Lieblang, president of Valassis Digital Media. “We are focused on delivering the greatest value possible on the brands consumers want most, which has led to agreements, such as this one, that puts more deal in shoppers’ hands.”

The cross-publishing arrangement is the first time Valassis and News America have worked together, and the winners in this case obviously are the consumers who get more, but also the consumer goods companies that are able to share their incentive offers with a broader market.

Henri Lellouche, SVP SmartSource iGroup, said the arrangement will help consumers save time and money, and that “it’s a decision that makes good business sense, while also helping the American shopper at a time when household budgets continue to be tighter than ever.”

Americans have been tightening their belts ever since the economy headed south a few years ago, which explains the trends occurring in the coupon world. Last year, for the second year in a row, total coupon distribution volume by consumer goods companies reached a record level with 332 billion coupons distributed, according to NCH Marketing Services annual "Coupon Facts" report. Most of those coupons, roughly 88%, were distributed via the familiar free-standing insert, also known as the Sunday circular.

Meanwhile, the average coupon face value in 2010 increased to $1.46 from $1.37 in 2009, and the dollar value of redeemed coupons ticked up to $3.3 billion last year, compared with $3.2 billion the prior year. Both figures are a marked increased from 2006 through 2008 when redemption volume was steady at $2.6 billion annually.

The increasing prevalence of digital coupons and their broader availability — courtesy of cross-publishing agreements of the type between Valassis and News America — should only cause redemption volume to grow in the coming year. It has never been easier to access coupons, and saving money is an enduring desire of shoppers.