Consumers Buy Newspapers for Coupons - Not News

The New York Daily News stopped printing coupons and circulars for several months during a feud between owners. When the battle ended and coupons returned, circulation increased 100,000.

Clearly, many people buy newspapers for coupons, not for news.

However, as more people turn to the Internet for their news, printable coupons have come into their own. According to the latest research from Coupons.com, digital coupon growth outpaced newspaper coupon growth for the first time in 2009 by a margin of 10 to one. Newspaper coupons are going the way of land phone lines, with nearly a third (13.1 million) of coupon users no longer clipping from their Sunday paper. That's up from 9.4 million in 2008.

Consumers have learned to appreciate the ready availability of free, online coupons, rather than paying to clip newspaper coupons. Digital coupons allow consumers to print coupons from home, download mobile coupons, or transfer them to store loyalty card accounts for later retail redemption. Promo codes also allow consumers to use coupons for online purchases.

While digital coupons play a large part in the public's defection from print coupons, major retailers like Sears have added to the problem by demanding double-digit rate cuts from print media. J.C. Penney has pulled back amid concerns newspaper coupons don't reach the desirable under-35 crowd.

This growing threat to newspapers comes at a particularly difficult time, as printing and distribution costs have risen with the skyrocketing prices of paper, ink and gasoline. Merchants and manufacturers are getting in on the action, offering coupons on their own Web sites as a means of building customer loyalty.

The newspaper industry is trying to fight back; not always with great success. Strategies include:

• "Sunday Select," essentially a home-deliver package of all the preprinted coupons and inserts without all that "newsy" content;
• providing a small selection of downloadable coupons on newspaper Web sites;
• a massive, coupon-education program sponsored by the Newspaper Association of America to lure back advertisers; and
• sites like Shoplocal.com or Zip2save.com, which allow users to download entire inserts.

Experts say any wholesale changes in the industry are doubtful as newspaper chains don't play well together. You can blame inertia; blame lumberingly large corporations who insist on having things their way; blame executives who refuse to reinvest in their product; or blame the industry's insistence on using outdated methods that worked for decades.

Traditional media's inability to make changes is particularly ironic, considering coupon use in America is growing for the first time in 17 years. The overall statistics are stunning.

• American consumers redeemed a mind-boggling 3.3 billion coupons in 2009 -- a 27-percent jump from 2.6 billion in 2008.
• 45-million people used online coupons in 2009, up almost 20 percent from 38 million in 2008.
• 13.1 million coupon users exclusively use downloadable coupons. That's up roughly 39 percent from 9.4 million in 2008.
• Nearly one-third of households with children use downloadable coupons.
• 30 percent of adults won't purchase from an online store without a coupon.
• Digital-coupon users are affluent, with an average household income of $97,000 (23 percent higher than the national average).
• They're better educated, with 34 percent of coupon users holding college degrees, compared to 27 percent of the total population.
• Women, who make the majority of household purchases, say the second-most common reason they use the Internet is to search for coupons. (Using e-mail was first.)

Without printing and delivery expenses, downloadable coupons have rapidly spread beyond the traditional food and household-product industries. For example, a study of travel coupon usage by About.com revealed 70 percent of respondents searched for discount airfare coupons and 67 percent sought discount hotel coupons.

The most-searched categories in printable coupons for December 2009 included clothing, haircuts, restaurants and products for children.

SOURCES
Media Daily News
MarketingCharts
Newspaper Association of America
GateHouse Media
MORI Research "How America Shops and Spends"
Nielsen, December 2009

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