What’s Next for Online Coupons?

The New York Times’ Bob Tedeschi wrote an article on Monday (which has been sitting on my desktop, among others, waiting to be read) about online coupons. It said much of what we already know about coupons but also provided some interesting numbers that lend perspective to the size of the online coupon market compared with print.

According to the article:

According to CMS Inc., a promotions company, consumers printed roughly 697 million Internet coupons in 2006, a 3.4 percent increase over 2005. Of those, 6.2 million were redeemed, a decrease of 4.4 percent from the previous year. Internet coupon distribution and redemption are only a small part of the overall coupon picture. In 2006, marketers distributed 286 billion coupons worth $331.8 billion, but consumers redeemed only 2.6 billion coupons worth just over $2.6 billion, CMS said.

There are also implications for deals that are in the works that could push overall online coupon distribution further. We’ll have to wait and see about those. Local online coupon distribution was also mentioned briefly in light of Valpak’s efforts over the past year.

While Coupons.com and CoolSavings cater mostly to national retailers and brands, Valpak, the local advertising division of Cox Enterprises, has moved aggressively in recent months to introduce local retailers to online coupons. Last summer the company introduced a service with Google in which users of Google Maps are shown Valpak coupons for merchants in areas where they search. Todd Leiser, general manager for Valpak.com, Valpak’s online division, said that his company had seen a “big spike in traffic” from the Google partnership. It plans in coming months to announce other partnerships aimed at increasing the online exposure of its advertisers’ coupons, Mr. Leiser said.

When it comes to local coupons, the next big story is likely in mobile coupon distribution. Redemption is still a challenge given that users can’t print out coupons while on the go, and in-store hardware (bar code readers) haven’t caught up with mobile coupon providers’ desire to push mobile coupons forward (among some other challenges).

When the stars begin to align for hardware, mobile local search business models and the innovation issues related to carrier control discussed last week, search-based coupon distribution (including online, mobile search and “send to mobile”) could play a much larger role.

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