General Mills, others try contextual online coupons

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Marketers are increasingly using the Internet as a convenient way to get coupons into the hand of consumers. General Mills and many other companies have partnered with a Silicon Valley ad network that is hoping to revolutionize the way consumers receive online, printable coupons.

“Online coupons are the future, we have had great success online,” said Karl Schmidt, director of promotion marketing at General Mills.

The company is one of many that has signed on to Brandcaster, a service that was publically launched this week through Coupons Inc. It aims to deliver content-relevant coupons to Internet users on particular Web sites.

Normally, a consumer would have to go to a site such as coupons.com or other online deal aggregators to retrieve printable coupons.

This system is different than other types of online advertising because clicking on a Brandcaster-generated coupon on a Web site will not direct the user to another site, said Coupons Inc. CEO Steven Boal.

“Publishers work hard to drive traffic to their site,” he said. “Our primary message for publishers is that we're bringing the world's leading brands to your Web site. We will never kick a consumer off a publisher's Web site.”

General Mills Schmidt said coupons are very measurable, and the company's statistics indicate that online coupons are redeemed much more frequently than traditional ones.

“The average redemption rate is significantly higher because consumer are selecting that coupon, rather than receiving a mass distributed one,” he said.

When a Web surfer clicks on a Brandcaster coupon, it will be automatically sent to their printer, Boal explained.

Boal said marketers spend $6.6 billion annually on coupons. But as newspaper subscriptions continue to decline, the traditional way of consumers receiving coupons, such as in a Sunday newspaper, will shift.

Schmidt agrees, and believes that once Web publishers discover that Brandcaster does not drive people off their Web sites, more will begin using the system, which in turn will help General Mills and others who offer coupons through Brandcaster.

Despite the popularity of Internet retail shopping, Boal said most consumer goods are still bought in-store.

“This is the only kind [of online advertising] that drives people to go in-store,” he said.

As food and gas prices continue to rise and the economy experiences slow growth, Boal believes that more people will take advantage of coupon offers. And he also believes younger consumers, such as new homeowners, will turn to the internet to find coupons rather than a circular.

Boal noted that “a lion's share” of Coupon Inc.'s business is consumer package goods, though they are expanding into restaurant and food service and consumer electronics.

Boal said the initial projections called for Brandcaster coupons to appear on some 35,000 Web sites the first 12 months of its existence. He expects to reach that number “a lot quicker than that.”

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