AOL close to deal to offer coupons via online service

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America Online is close to a deal with SuperMarkets Online to offer its 16 million subscribers coupons for leading package-goods products.

SuperMarkets Online, owned by Catalina Marketing Corp., already offers coupons on its Web page. But AOL's size and reach--51% of its members are women--will increase substantially the number of potential cyber-coupon clippers.

Will Gardenswartz, senior VP-marketing and business development at SuperMarkets Online, confirmed the talks, saying that one purpose of the deal "is to challenge the FSI market."

Free-standing inserts delivered through newspapers represent a $1.4 billion ad business, led by News America FSI and Valassis Communications.

PACKAGE-GOODS LURE

For AOL, the deal is seen as a way to convince package-goods marketers to advertise on its service. Jonathan Sacks, AOL's senior VP-program operations, couldn't be reached for comment on the talks last week.

SuperMarkets Online would use the same couponing format as on its Web site. Users enter their local ZIP code and get a list of stores in their area.

After clicking on the store where they want to shop, a list of products appears. Users then print out the list, accompanied by a bar code. When the product is purchased and the bar code is scanned at the participating market, users are issued what are called Web Bucks. They are used as cash for any item in the store when the user next makes a purchase.

Major marketers such as General Mills, Kraft Foods, Nabisco Holdings Corp. and PepsiCo currently offer products on the couponing service. Mr. Gardenswartz said more than 40 marketers have deals with SuperMarkets Online to issue coupons.

He said there are 8,000 to 10,000 stores that accept Web Bucks.

If the deal is consummated, coupons on AOL will be available initially through its Digital City area. That's where local content is aggregated on the service.

AOL also plans to revamp its food- and home-oriented content areas, an AOL insider said. Part of the reason AOL is redesigning these areas is to create appropriate areas of interest for package-goods advertisers.

Copyright February 1999, Crain Communications Inc.

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