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Consumer Packaged Goods Marketers Strategically Increase Coupon Mix And Adjust Tactics

LIVONIA, Mich., July 30, 2013 /PRNewswire/ --  Valassis (NYSE: VCI), a leader in intelligent media delivery, released today mid-year 2013 coupon facts that indicate consumer packaged goods (CPG) marketers have continued to strategically evolve their mix of coupons offered, including which products are promoted with coupons, how consumers receive coupons and various tactical offer-level changes.

The U.S. Mid-year 2013 CPG Coupon Industry Facts Report prepared by NCH Marketing Services Inc., a Valassis subsidiary, reveals a 1.8 percent increase in coupon distribution, driven by an increase in the non-food segment. In the first half of 2013, coupons for non-food products represented 62.5 percent of all coupons distributed, a 2.9 percent increase from the first half of 2012. Overall, CPG manufacturers issued 168 billion coupons in the first six months of 2013.

The largest volume of coupons distributed in the first half of 2013 was via the free-standing insert (FSI), increasing this medium's share to 91.1 percent. Digital coupons have continued to sustain double-digit growth through expanded utilization by marketers, retailer integration that leverages their relationships with loyalty program shoppers and growing consumer adoption of new savings opportunities. According to this report, digital coupons represent less than 1 percent of all coupons distributed.

"CPG marketers continue to turn to the FSI to drive volume and market share through the significant advertising impact of FSI pages, and to align their offers with retailers that are increasing their use of the FSI," said Suzie Brown, Valassis Executive Vice President of Sales and Marketing. "At the same time, they are also expanding the use of digital formats that continue to grow but on a smaller scale. For marketers, it's about finding the right media mix and defining the coupon characteristics to both activate consumers and still drive ROI for their brand."

Marketers' strategic choices and tactical changes included:

  • Shortening expiration dates by 3.2 percent to 9 weeks on average, led by the food segment where expiration dates were reduced by nearly one week;
  • Extensively using coupons requiring the purchase of two or more products, particularly for food items, which represents 42 percent of their coupon distribution; and
  • Increasing the average face values distributed by 4.5 percent to $1.62, driven by non-food segment marketers, yet they have managed their total redemption liability through the mix of offers made available in the market.

"Following recession-driven years of unusual redemption growth, marketers have adjusted their strategies and we have seen indications of response stabilization," said Charlie Brown, NCH Vice President of Marketing. "In 2013 there is a wider divide among food and non-food products as they promote through a slightly different mix of media and tactics to achieve their individual objectives."

In response to the marketers' adjustments, redemption volume for the first half of 2013 declined 8.1 percent. Digital coupon formats, however, have grown, with redemption reaching 6.1 percent of the total for print-at-home coupons and 2.5 percent for paperless formats. That growth includes contextual coupon sites, retailer sites and a stronger integration in the media mix with desktop, social and mobile advertising campaigns.  The integrated campaigns, that companies such as Valassis are using, help marketers engage and activate today's always-connected consumer along their path to purchase. Overall, consumers saved $1.8 billion in the first six months of 2013.

The full 2013 Coupon Facts Report is available at www.nchresourcecenter.com.

About Valassis Valassis (NYSE: VCI) is a leader in intelligent media delivery, providing over 15,000 advertisers proven and innovative media solutions to influence consumers wherever they plan, shop, buy and share.  By integrating online and offline data combined with powerful insights, Valassis precisely targets its clients' most valuable shoppers, offering unparalleled reach and scale.  Valassis subsidiaries include Brand.net, a Valassis Digital Company, and NCH Marketing Services, Inc. Valassis consumer brands include RedPlum® and save.com. Its signature Have You Seen Me? ® program delivers hope to missing children and their families. To learn more, visit Valassis.com.

Cautionary Statements Regarding Forward-looking Statements This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: price competition from our existing competitors; new competitors in any of our businesses; possible consolidation in our client base, a significant decrease in the number of stores in our in-store retailer network or a shift in client preferences for different promotional materials, strategies or coupon delivery methods, including, without limitation, as a result of declines in newspaper circulation and/or increased competition from new media formats including digital; an unforeseen increase in paper or postal costs; changes which affect the businesses of our clients and lead to reduced sales promotion spending, including, without limitation, a decrease of marketing budgets which are generally discretionary in nature and easier to reduce in the short-term than other expenses; our substantial indebtedness, and ability to refinance such indebtedness, if necessary, and our ability to incur additional indebtedness, may affect our financial health; the financial condition, including bankruptcies, of our clients, suppliers, senior secured credit facility lenders or other counterparties; certain covenants in our debt documents could adversely restrict our financial and operating flexibility; fluctuations in the amount, timing, pages, weight and kinds of advertising pieces from period to period, due to a change in our clients' promotional needs, inventories and other factors; our failure to attract and retain qualified personnel may affect our business and results of operations; a rise in interest rates could increase our borrowing costs; governmental regulation or litigation affecting aspects of our business, including laws and regulations related to the internet, internet-related technologies and activities, privacy and data security; potential security measure breaches or attacks; clients experiencing financial difficulties, or otherwise being unable to meet their obligations as they become due, could affect our results of operations and financial condition; uncertainty in the application and interpretation of applicable state sales tax laws may expose us to additional sales tax liability; a reduction in, or discontinuance of, dividend payments or stock repurchases; and general economic conditions, whether nationally, internationally, or in the market areas in which we conduct our business, including the adverse impact of the ongoing economic downturn on the marketing expenditures and activities of our clients and prospective clients as well as our vendors, with whom we rely on to provide us with quality materials at the right prices and in a timely manner. These and other risks and uncertainties related to our business are described in greater detail in our filings with the United States Securities and Exchange Commission, including our reports on Forms 10-K and 10-Q and the foregoing information should be read in conjunction with these filings. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Valassis

Stock quotes in this article: VCI 
Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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