By Published on .

Rupert Murdoch is starting a battle on supermarket shelves, using the clout of his News Corp. to muscle into territory long occupied by at-shelf coupon leader ActMedia.

The media giant's News America FSI unit began rolling out at-shelf coupon dispensers in more than 2,000 stores last month, offering supermarkets and package-goods retailers special deals and incentives to participate.

Its move into a segment dominated by ActMedia comes as News America's market share in its core free-standing inserts business slips.


ActMedia has been forced to go on the defensive. It's already raising the prices paid to certain retailers for the right to exclusively operate its Instant Coupon Machines in more than 50,000 U.S. supermarkets, and it may need to make more concessions.

"News America is buying off retailers, using their marketplace clout to gain leverage, and it's causing us a lot of problems," said Wayne LoCurto, president-CEO of ActMedia.

News America FSI President Dominick Porco said his company is merely using its "merchandising power," by offering special FSI deals to supermarkets and other incentives through its ownership of TV Guide. The weekly magazine recently introduced a coupon section and has been promoting it on its covers.

"Many planning-driven consumers are still hooked on coupons found in the Sunday paper, but a lot of people respond to impulse purchases," Mr. Porco said. "The in-store marketing arena is a $1 billion business, and we want to get in on it."

He said News America FSI will announce another in-store electronic marketing program later this year that will be an added enticement for marketers interested in doing promotional deals through News America. He didn't provide details.


ActMedia also says News America FSI "ripped off" the design of its coupon-dispensing machine on supermarket shelves, and the company predicts News America will ultimately fail in its at-shelf coupon marketing efforts.

"They have a very small field marketing sales force compared to ours, and no system to maintain and refill the coupon dispensers, which is a big challenge," Mr. LoCurto said. "It's also going to be impossible for News America to make a profit when they're paying retailers as much as they are."

ActMedia said revenues from its Instant Coupon Machines are up 7% from a year ago, and overall revenues are up 25% from the company's total promotional systems including co-op couponing and sampling programs.

"Between our gains in the shelf coupon arena and Catalina Marketing's gains in scanner-based checkout promotions, we estimate News America has lost 25% of its FSI business," Mr. LoCurto said. "It's no wonder [News America] is trying to get into our business."

News America recently lost its No. 1 status in the FSI arena; market share is now split 50-50 with Valassis Communications, according to the latest industry figures.

Valassis' FSI business increased 5% in 1996, according to its yearend results announced last week.


ActMedia controls 90% of the in-store coupon business; Catalina has 75% of the electronic in-store checkout promotion business.

In addition to raising prices paid to stores, ActMedia hopes to lock in several exclusive relationships with major supermarket chains including Von's, recently acquired by Safeway. ActMedia is the exclusive at-shelf coupon distributor for Safeway.

"We've fought off competitors for 20 years in the at-shelf coupon arena, and we'll prevail over News America, too," Mr. LoCurto said.

Mr. Porco's less-combative response: "We are committed to the in-store marketing business."

Most Popular
In this article: