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					ADlytics Research Project:
Consumer Coupon Trends
In an increasingly value-focused market,
consumer goods companies can win by tapping
rising interest in online coupons.


Overview
As American families focus on getting the most purchasing value from every dollar, coupons are increasingly
appealing and relevant to their lives. This trend makes coupons an important tool for marketers who want to
capture the attention of the 116 million retail shoppers in the U.S. While the current coupon market is dominated
by offers in Sunday newspapers, newspaper circulation is declining, creating a window of opportunity for
innovation in coupon distribution, especially to younger consumers.
Research from Information Resources (IRI) and AOL demonstrates that online coupons can be an effective tool
to attract trial users and gain market share, with nearly four out of every 10 shoppers – a total of forty million
consumers – indicating that they would be very likely to use coupons accessed online.


Methodology
In partnership with IRI, AOL’s Business Intelligence Team conducted a survey focusing on consumer usage of
traditional newspaper coupons and their interest in digitally distributed online coupons. More than 36,000 IRI
panelists were surveyed in September, 2008 to establish whether they utilized either daily or Sunday newspaper
coupons (n=20,592) and how likely they would be to use a coupon they found online (very likely = 9,420).


Findings
Coupon Habits by Age
From 2006 through 2008, the overall industry coupon redemption rate was approximately 2% of all coupons
issued, with coupon adoption skewing toward older demographics. More than 90 million consumers (78% of retail
shoppers) use newspaper coupons, with nearly one out of every four of the newspaper coupon clippers likely to
be at least 65 years old (see Figure 1). Digitally distributed coupons, on the other hand, are more likely to appeal to
middle-aged demographics including families with school-age children.
The youngest market segments are the most receptive to online coupon offers, with a majority (51%) of 18 - 24
year-old shoppers indicating that they would be very likely to use coupons presented to them online. Interest in
online coupons is relatively level across segments of the market between age 25 - 54, but it declines (see Figure 2)
to less then 40% among the 55 - 64 segment and to 30% among consumers 65+.

Coupon Habits by Life-Stage
In correlating coupon interest to life-stage, survey results indicate that young couples
without children (11M HHs) are among the respondents most likely to use a coupon they
 found online, followed by shoppers with younger children (19M HHs) and older children
(19M HHs). Single older shoppers (21M HHs) reported the least interest in digital
coupons (see Figure 3).
Conclusion
Consumer packaged goods (CPG) manufacturers have the opportunity to reformulate and enhance their coupon
distribution strategies by leveraging the internet to combat the declining effectiveness of newspaper as a coupon
circulation vehicle.
In addition to increasing their appeal to younger consumers, the internet also enables marketers to distribute
coupons any day of the week and to out-of-home locations including mobile devices or offices. This dramatically
increases the number of touch points available to reach consumers with coupon offers.
Finally, online coupons offer the ability to integrate branding objectives into coupon promotions, because they can
reach a much broader and/or targeted audience beyond self-selecting coupon clippers.
With the value shopper segment of the marketplace rapidly growing, online coupons are an important tool to reach
the busy and cost-conscious American shopper.


Figure 1: Age Distribution of Digital Coupon Intenders and
Traditional Coupon Clippers
Digital coupons are a great way to win over younger shoppers. Nearly 45% of the consumers who are most
receptive to online coupon offers are between 18 and 44, while almost one out of every four traditional coupons
users is 65 or older.


100%

  90%                                16.8 %
                                                                     22.4 %


  80%
                                     17.0 %
  70%                                                                17.8 %        65+            35 -44

                                                                                   55 -64         25 -34
  60%
                                     22.2 %                                         45 -54        18 -24
  50%                                                                20.6 %


  40%
                                     21.5 %
  30%                                                                19.9 %


  20%

                                     21.0 %                          18.3 %
  10%
                                     1.5%                            1.0%
   0%

              Digital Coupon Intenders          Newspaper Clippers

       likely would you be as use coupons you found online?
Q. How*Digital Coupon Intenders: Shownto those responding “Very Likely”
• Those who responded obtained daily or Sunday newspaper inserts.
          Source: IRI
• Digital Coupon Intenders: shown are those responding “Very Likely”.
Source: IRI
Figure 2: Interest in Digital Coupons and Incidence of
Traditional Coupon Use by Age
Newspaper coupon utilization generally correlates positively with age among older segments of the population,
peaking at 83% among consumers 65+. The correlation is reversed with digital coupons, with interest peaking
among the youngest consumers.



          Digital Coupon Intenders

          Newspaper Clippers



                                                                                                       83%

                                                                                       79%
                                                                           79%
                                                         77%
                                           71%
                68%



        51%
                                                   41%               41%
                                     40%
                                                                                 37%
                                                                                               30%




         18 -24                      25-34          35 -44           45-54       55 -64          65+


Q. How likely would you be to use coupons you found online?
*Digital Coupon Intenders: Shown as those responding “Very Likely”
•Source: IRI responded obtained daily or Sunday newspaper inserts.
  Those who
• Digital Coupon Intenders: shown are those responding “Very Likely”.

Source: IRI
Figure 3: Interest in Digital Coupons and Incidence of
Traditional Coupon Use by Life-stage
While historically ambivalent to traditional coupons, younger couples are the most likely life-stage group to
use online coupons, indicating an opportunity to influence product choices within this digitally savvy segment.


              Digital Coupon Intenders

              Newpaper Clippers




                                                                                                       84%

               77%                       78%
                                                                        74%             73%
                                                         66%




                                                                                  44%
      41%                         41%
                                                                                                 39%
                                                   34%
                                                                  29%




   HH w/ younger               HH w/ older          Young           Older         Young           Older
     Children                   Children            Singles        Singles        Couples        Couples

Q. How likely would you be to use coupons you found online?
*Digital Coupon Intenders: Shown as those responding “Very Likely”
• Digital Coupon Intenders: shown are those responding “Very Likely”.
 Source: IRI
Source: IRI




     HH w/ Younger Children                    Households of two or more members where
                                                  the oldest child is under 11 years old
                                                                                               HH with
                                               Households of two or more members where         Children
      HH w/ Older Children
                                                  the oldest child is 12-17 year of age

                                                  Single-member households between
              Young Singles
                                                          18-44 years of age

              Older Singles                    Single-member households age 45 or older
                                                                                              HH without
                                               Households of two or more members with no       Children
              Young Couples                     children; oldest household head age 18-44

                                               Households of two or more members with no
              Older Couples
                                                 children; oldest household head age 45+
  Figure 4: Sunday Newspaper Readership Trends
                                           2003                             2008   % Change
           18-34                           26%                              24%     -12%
           35-44                           22%                              19%     -18%
           45-54                           20%                              21%      4%
           55-65                           13%                              16%      20%
            65+                            19%                              21%      10%

  Source: IRI




  Figure 5: A Day in the Life of Multimedia Moms
  Online coupons increase a marketer’s chances of reaching moms who have grown up with the computer and are
  comfortable using the latest technology. With moms packing 27 hours of activity into a typical day, digital coupons
  will help marketers capture attention and time with Moms, who use the Internet an average of 2.8 hours per day.




  Source: AOL/OMD Living La Rapida: Focus on Global Moms (US Data)
Source: AOL/OMD Living La Vida Vida Rapida: Focus on GlobalMoms (US Data)

				
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