By: Leo J. Shapiro, Steve Yahn, and Erik Shapiro
More than half (55%) of all consumers look for and clip coupons for shopping. Most clip paper coupons from newspapers and a few click electronic coupons from the Internet, according to our Leo J. Shapiro & Associates national survey of 450 consumers conducted in February, 2007. Here’s how it breaks down:
— Four in ten consumers (40%) are old-school — they clip newsprint coupons but don’t click electronic coupons.
— 12% of consumers both clip coupons from newspapers and click coupons from the Internet,
— and a small number, about 3%, are from the new generation, who click electronic coupons but don’t clip newsprint coupons.
While newspapers are still the more major source of coupons, the Internet has succeeded in distributing coupons to 15 percent of consumers. As this number grows to where Internet companies establish a secure base of coupon clickers, they are likely to improve their service and grow faster.
Coupons are basic tools for advertisers of both established and new brands. Coupons are useful to boost sales of established brands because they are a way to reduce prices temporarily. The brand building power of coupons for new products is valuable, because brands exist in the minds of consumers as memories of experiences. And coupons encourage new product trials, the stuff of memories.
A traditional way to launch a new product is with a skilled pitchman, who not only demonstrates but takes account of the customers’ reactions as they romance the products. Online media, which have the potential for being interactive and for transmitting massive amounts of information cheaply, comes closer than print media to approximating the effectiveness of a live pitchman. Online media pitch droids could custom-create coupons fitted to the reactions of particular online customers.
Online coupons will become increasingly sophisticated, effective, and widespread. Newsprint coupon clippers will continue to convert into electronic coupon clickers. And a new generation of coupon users will grow up who will have a choice to actually clip a newsprint coupon with scissors or click electronic coupons with a mouse.
Online coupon distribution is likely to eventually dominate. The question is whether newspapers or Internet companies will own the integrated print and online publications.
Survival and growth of the newspaper industry depends on its ability to maintain coupon distribution and other sources of advertising revenue. To hold on, newspapers must develop better information-handling technologies to integrate the print and online editions of the newspaper.
This report on coupons is part a series about the issues involved in managing the vulnerability of various categories of newspaper advertising revenue to predation by Internet companies. Our last column described how the Internet and newspapers are vying for share of help wanted advertising. A future column will show how the Internet hurts newspapers in the reach of their real estate advertising.
Related E&P story: Boodle VP Responds to SAGE Advice Column About Online Coupons