FSIs Challenged By Digital Coupons

Digital coupon usage continues to gain traction as a marketing tactic, according to a new report by Kantar Media.

The research firm reported that digital coupon distribution was up just over 12% in 2011 versus the prior year. By comparison, the number of coupons printed in freestanding inserts last year was down 6.5%. And year-to-year spending on newspaper inserts declined by 12% to about $1.3 billion.

Kantar reported that there was a 2.5% increase in the number of consumer packaged goods using digital coupons last year. One-third of all the manufacturers that distributed coupons digitally in 2011 opted out of FSIs entirely.

“The increase in the number of manufacturers that are active in the digital space makes it even more important to monitor competitive promotion activity across all media,” said David Hamric, general manager, Kantar Media Marx, the Kantar unit that monitors coupon activity. 

Of the 291 new product launches last year that used coupon support, 117 or 40% used digital coupons in the media mix, Kantar reported. 

On the print side, in 2011, more than $421 billion in consumer incentives were delivered via FSI coupons -- down 6.7% from 2010. During the same period, over 272 billion coupons were distributed within more than 205 billion FSI pages. For the first time in at least the last 10 years, Kantar reported, FSI coupon average face value did not increase. At $1.55, it showed a 0.2% decline versus 2010. 

The CPG sector remained the largest user of FSI pages with a 74% share, followed by direct response (16%), and franchise, comprised of restaurants and other businesses (10%).  CPG pages decreased for the first time since 2006, down 4.4%. Also continuing a downward trend, direct response posted a 3.9% decrease versus 2010. However, franchise pages increased 4.2% after flat activity levels in 2010.

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