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Google Insights for Search shows searches for "coupon" or
"coupons" recently indexed at more than double pre-recession levels
from 2006. After steady growth between late 2007 and 2009, search
growth for coupons leveled in 2010, only to reach a new peak in the
first half of 2011 as rising gas prices and a slowing economy
appeared to rekindle interest in deals.
Meanwhile, even as Kantar data shows inserts are down, Groupon's
rapid growth has helped dispel doubts that couponing can survive
the decline of the Sunday newspaper or print media broadly. And its
rapid growth outside the U.S. has helped make couponing, which had
been a disproportionately American institution, a more global
"When there's a recession, focusing on building brand equity is
a luxury that becomes unaffordable, because you've got to protect
your base, and there's no better way to protect your base than
couponing,"said David Diamond, a marketing consultant and veteran
of Catalina Marketing, operator of the Checkout Coupon system.
Not everyone is convinced. "I continue to believe that the
conceptual basis of couponing is bad for equity," said former
P&G Chairman-CEO Durk Jager in an email. Mr. Jager, who in his
days as a senior executive there led the charge to reduce reliance
on couponing and trade deals, refers to coupons as "wasteful"
because they didn't pay for their expense and led to reduced
consumer loyalty. Various forms of "get one free" coupons do at
least get consumers to try products, something he said cents-off
coupons rarely did, but all forms, "show a short-term boost.
However, coupons are easy to do, and too many use them under
He acknowledged, though, that his own efforts to eliminate
coupons never prevailed. Most marketers, he said, "never understood
the conceptual basis why coupons undermine loyalty and brand
equity" -- basically that they don't produce enough long-term sales
to pay for the short-term investment.
All that said, coupons do appear to produce at least some repeat
sales, more so than temporary price reductions at the retail shelf.
A 2000 study by Promotion Decisions based on an analysis of
shopper-card data found that in the long run, advertising tended to
produce twice the initial bump in sales it created, while trade
promotion had little long-term multiplier effect. Couponing fell
somewhere in between, indicating it generates more repeat purchases
than trade promotion but less than advertising.
Far from abandoning coupons, P&G a decade ago made them the
centerpiece of a corporate-branding effort, pooling most of the
company's coupons into its monthly P&G BrandSaver circular
distributed by Valassis' Redplum unit and buttressed by online
deals via such sites as PGbrandsaver.com and
"Our outlook is the same as it has been historically" on
coupons, a P&G spokesman said. "They provide an opportunity for
P&G brands to build consumer awareness and trial, as well as a
platform to tell our value story."
The old notion that coupons only appeal to highly deal-driven
consumers and not to "best customers" is falling fast. Todd Morris,
exec VP-marketing of Catalina, said its research shows that more
than 70% of shoppers will redeem at least one Checkout Coupon
annually and "the greatest concentration is with most valuable
customers with the biggest baskets."
Another factor auguring growth for couponing is a rapid shift of
industry and consumer attention toward digital offers, often more
targeted ones. Catalina's digital offers may have less than 10% the
distribution of newspaper coupons, but the company has 10 times the
redemption rate, at 6%, Catalina's Mr. Morris said.