How publishers are tapping into the online couponing craze

Can publishers turn consumers’ clip-and-save habits into click-and-earn opportunities?

Consumers’ appetite for online coupons – either printable coupons or coupon codes that can be redeemed online – has increased since the recession tightened its grip on household budgets. In 2008, visitors to online coupon sites increased 42 percent from 2007, according to Nielsen NetRatings. More than 34 million people visited coupon sites in May of this year, up 19 percent over the previous month, according to comScore.

There certainly seems to be plenty of potential for continued growth: A study released in March by Platform-A and Information Resources Inc. (IRI) concluded that more than 90 million consumers – about 78% of retail shoppers – currently use newspaper coupons, and that four out of every 10 shoppers – totaling 40 million consumers – would likely use online coupons. The youngest shoppers were most receptive to online coupon offers, with 51% of 18-24-year-olds saying they would be very likely to use coupons presented to them online.

The current model for online coupons is driven by a dizzying number of dedicated coupon sites, including coupons.com, MyCoupons, DealCatcher, Savings.com, Valpak, Coupon Cabin. Now, some of these companies are looking to syndicate their networks with publishers, joining a handful of providers who sell Internet coupon software and services.

2 WAYS TO DRIVE REVENUE

Publishers have two ways to generate revenue directly from Internet coupon microsites. First, they can host merchant coupons and get a cut of revenue for every coupon printed from their site. Second, they can incorporate coupons into their advertising offerings.

“We see it as another product in our basket of tools and services,” said Dean Muscio, director of digital media with New Hope Natural Media, a division of Penton Media. New Hope recently launched an e-coupon portal, developed by e-Centives, on its Delicious Living website.

“New Hope serves both B2B and B2C markets, and the coupon program is a really nice segue between the two,” said Muscio. “Our manufacturers can almost touch the consumer directly through us.”

Other publishers are hooking up with established coupon providers to power their coupon portals. The Star-Tribune in Minneapolis-St. Paul, for example, is offering a coupon portal through a partnership with MyCoupsons.com.

MyCoupons' syndication program enables publishers to incorporate coupons from the company's 280 merchant partners; MyCoupons developers do the integration work for free, and the companies evenly split the commission that merchants pay each time a coupon is redeemed.

“Publishers get a turnkey couponing engine for free,” said Greg Stoltz, president of MyCoupons. “Why not have your own online coupon portal instead of pushing shoppers off to someone else?”

Another coupon provider, Coupons.com, is similarly running coupon galleries for Hearst Magazines' Delish.com Time's AboutYou.com. Those sites get a share of every coupon printed from their site.

Merchants cashing in

Coupon portals also present an opportunity for publishers to promote their own products and services to their readers, potentially driving even more revenue.

Online coupons have certainly proven to be a viable revenue driver for merchants, some of whom are now utilizing mobile and social media to put their promotions in front of consumers. PC maker Dell, for example, attributed $3 million in revenue to coupons and other promotions it has made to its followers on Twitter since 2007. 

Can publishers cash in as well? Probably not to the same extent as Dell or other retailers. But online couponing may present some compelling opportunities for incremental sales with little up-front development costs.

“There’s a lot of application for e-coupons in everything we do,” said Muscio. “We expect to see a lot of demand.”