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Belch: Advertising and
Promotion, Sixth Edition
V. Developing the
Integrated Marketing
Communications Program
16. Sales Promotion © The McGraw−Hill
Companies, 2003
Coupon Distribution Coupons can be disseminated to consumers by a number
of means, including freestanding inserts in Sunday newspapers, direct mail, newspapers
(either in individual ads or as a group of coupons in a cooperative format),
magazines, and packages. Distribution through newspaper freestanding inserts is by
far the most popular method for delivering coupons to consumers, accounting for 84
percent of all coupons distributed in 2001. This growth has come at the expense of
vehicles such as manufacturers’ ads in newspapers (newspaper ROP), newspaper
co-op ads, and magazines.
There are a number of reasons why FSIs are the most popular way of delivering
coupons, including their high-quality four-color graphics, competitive distribution
costs, national same-day circulation, market selectivity, and the fact that they can be
competition-free due to category exclusivity (by FSI company). Prices for a full-page
FSI are currently about $6 to $7 per thousand, which makes FSI promotions very efficient
and affordable. Because of their consumer popularity and predictable distribution,
coupons distributed in FSIs are also a strong selling point with the retail trade.
The increased distribution of coupons through FSIs has, however, led to a clutter
problem. Consumers are being bombarded with too many coupons, and although each
FSI publisher offers product exclusivity in its insert, this advantage may be negated
when there are three inserts in a Sunday paper. Redemption rates of FSI coupons have
declined from 4 percent to only 1.3 percent and even lower for some products (Figure
16-4). These problems are leading many marketers to look at ways of delivering
coupons that will result in less clutter and higher redemption rates, such as direct mail.
Direct mail accounts for about 2.1 percent of all coupons distributed. Most are sent
by local retailers or through co-op mailings where a packet of coupons for many different
products is sent to a household. These couponing programs include Metromail’s
Red Letter Day, Advo System’s Super Coups, and Cox Target Media’s Valpak.
IMC Perspective 16-3 discusses how Cox Target Media recently redesigned the familiar
Valpak blue envelope that delivers billions of coupons each year and created an
advertising campaign to improve the image of the direct-mail piece.
Direct-mail couponing has several advantages. First, the mailing can be sent to a
broad audience or targeted to specific geographic or demographic markets such as
teenagers, senior citizens, Hispanics, and other market segments. Firms that mail their
Grocery Health and
Media Products Beauty Products
FSI 1.3% 0.8%
Newspaper 0.8 0.4
Magazine 1.0 0.6
Direct mail 3.2 3.5
Regular in-pack 6.3 2.6
Regular on-pack 8.4 13.7
In-pack cross-ruff 4.7 8.4
On-pack cross-ruff 5.8 6.2
Instant on-pack 18.1 40.8
Instant on-pack cross-ruff 5.3 4.9
Handout electronically dispensed 7.2 4.8
On-shelf distributed 8.3 5.8
All other handouts in store 3.3 4.4
All other handouts away from store 4.0 4.2
Source: NCH Marketing Services, 2002 Trend Report.
Figure 16-4 Coupon
redemption rates by media
type
531
Chapter Sixteen Sales Promotion