P&G, OTHERS TRY NEW USES FOR COUPON-HEAVY MEDIA: AD MESSAGES TAKE PLACE OF CENTS-OFF OFFERS

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A recent Carol Wright mailing included an ad for Mountain Spring-scented Tide detergent with a scratch-and-sniff panel. A free-standing insert distributed this summer featured an offer for Tide Racing Team apparel.

Missing in both cases were the cents-off coupons that consumers expect to see when they open such envelopes and inserts.

SURPRISING TWIST

Tide marketer Procter & Gamble Co. and other package-goods players have been trying for some time to cut back on coupons. But in a surprising twist, the marketers are continuing to use free-standing inserts, in-store couponing systems and direct-mail coupon delivery systems to deliver straightforward advertising messages.

The approach also extends to other brands and media. A Cincinnati direct-mail shopper filled with coupons from local stores carried an ad for P&G's Pert shampoo with no coupon. And in place of a Checkout Coupon, offered at a terminal near the register, P&G uses a message comparing its Charmin toilet tissue to Kimberly-Clark Corp.'s Kleenex Cottonelle through Catalina Marketing Corp.'s in-store system.

A P&G spokesman said such approaches are "consistent with the company's efforts to reduce the level of couponing while keeping the brand in front of the consumer-an activity that we think makes sense for everyone to follow."

TARGETED AD MESSAGES

Indeed, others are doing just that. Interest in targeting ad messages to competitors' customers, rather than moving away from coupons per se, has made Checkout Messages-which offers non-coupon ads at the register-into Catalina's fastest-growing business, said David Diamond, exec VP-new business applications.

Non-coupon messages still account for just under 10% of Catalina's $170 million in annual sales, Mr. Diamond said. But Catalina is looking to expand its non-coupon business further with the Confirmed Targeted Advertising Network, which four package-goods marketers have tested so far.

The network uses a Checkout Message offering consumers-usually of a competing brand-free phone time or another premium if they call an 800-number. When they call, consumers hear an ad, often bashing the competition.

Others are following P&G's lead in using direct mail for non-coupon ads.

Another recent Carol Wright mailing had an insert from Lever Bros. saying Dove is better for kids' skin than P&G's Ivory. Instead of a coupon, the piece included a mail-in offer for a child's bath mitt.

In stand-alone direct mailings, inserts from package-goods marketers without coupons are still unusual, and P&G stands out as the main user, said John Cummings, whose John Cummings & Partners tracks database marketing programs.

'DARING' USE OF MAIL

"They seem to be using mail as another medium to deliver an advertising message," Mr. Cummings said. "Historically, it's been very cost-inefficient to do that. Mail was justified because you could get it to accomplish a couple of goals-a promotional goal in generating trial and reinforcing the advertising message. When you take the promotional element away, it becomes a more daring use of mail."

Without coupons, direct mail has to stand out through other consumer-involvement tactics, Mr. Cummings said.

Direct marketing executives see limits on how far the strategy can go, since consumers are trained to look at FSIs, Checkout Coupons and direct mailings for coupons.

A direct marketing executive questioned whether the approach will just confuse consumers: "From the perspective of the consumer, I would think they would say,

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