The emergence of deals has reinvigorated local merchant promotions, but traditional promotions leaders think they can absorb some of the best parts of deals as part of their “offer cloud” while strengthening their existing direct marketing businesses, according to panelists speaking at ILM West in San Francisco.

Entertainment.com CEO Dean DeBiase said that the traditional Buy One Get One Free premium coupon book, which sells books in 150 markets, is now actively adding deals to its online product, along with other features, such as maps and reviews. “We are repositioning Entertainment to go heavily into digital.”

At the same time, DeBiase said, it is critical that Entertainment’s digital upgrade continue to attract a mix of “old schoolers” that provide low-value offers, such as consumer packaged goods; and win-winners, with high-value offers. “We are spending most of our time in win-winners,” he said.

What he wants to avoid, however, is the “short timer” with low-quality, unsustainable offers, which is how he characterizes much of what Groupon and LivingSocial initially focused on. Entertainment.com has 80 percent retention and most values the long-term relationships, he added.

Cox Target Media President Michael Vivio said his plans are to create synergy between the company’s huge and low cost Valpak print coupon business and deals. “We are in the process of disrupting our business model,” he said.

“Our premise is that merchants can have two offers in the same envelope.” Valpak is in a unique position to give away its printing for free in order to push the prepaid offers, he said. “We are teaching people to prepay for coupons. Not many companies can brag about a distribution list of 500 million envelopes a year,” he adds.

Like DeBiase, Vivio emphasizes that Valpak’s key asset is its merchant database. “Our retention rate is as high as other people’s churn rates,” he noted.

Viveo and DeBiase at ILM West