January 2, 2008
Coupon lovers, take heart. The era of waiting, scissors in hand, for the Sunday newspaper circular is over. Valassis Communications, which distributes paper coupons for products such as Eggo waffles and Dr Pepper soda, will take a giant leap onto the Internet today by introducing a portal for coupons called RedPlum.
com. Until now, Valassis has distributed coupons primarily through newspaper inserts and “snail mail” envelopes. Now the company will focus on promoting the RedPlum brand, using its traditional paper circulars to direct people to the Web site. The idea is to attract shoppers — particularly women — online with the promise of coupons, then keep them on the site with other content, such as Consumer Reports-style product reviews and a searchable database of recipes, a la Epicurious.com. Valassis has hired three people to create content for the site, and it plans to bring in more. RedPlum will join a cadre of similar sites, such as CoolSavings.com, Coupons.com and ValPak.com, that have struggled to build traffic and wean consumers off paper coupons. In the 12 months that ended in October, the number of visitors to coupon sites grew by only 6 percent over the previous year, to 20.3 million from 19.1 million, according to comScore, an Internet marketing research company. RedPlum will try to stand out by offering helpful features — including the ability to plug in a shopping list and get a matching list of coupons — and by letting people visit its site anonymously. In addition to grocery coupons, the site will offer discounts on items such as digital cameras and special deals on family vacations. “If Google owns search and Amazon owns shopping, RedPlum wants to own value,” said Suzie Brown, chief marketing officer of Valassis, which is based in Livonia, Mich. “To hit the radar screen, we will have to do a fair amount of revenue, we’re not looking for this to replace anything we’re doing currently.” Brown said RedPlum is trying to be different from sites like CoolSavings. com and Eversave.com that require people to enter their full name, e-mail address, birth date and gender. “The single biggest thing is, consumers do not want to give out personal information, and we don’t ask them for anything,” she said. People who want to get coupons specific to where they live will have the option of entering a ZIP code, she said. Valassis has been working on an Internet strategy for more than two years. The goal was to create a brand that would resonate across all forms of media, particularly with women, said Andrea Sullivan, executive director for client services at Interbrand New York, a subsidiary of the Omnicom Group, which worked with Valassis on the project. “The name RedPlum creates a strong visual and emotional connection for customers, one that’s about celebrating the little pleasures in everyday life,” Sullivan said. She said discount seekers like to share their finds with friends and family, so the brand could catch on through word of mouth. For these shoppers, “part of the fun is the hunt,” she said. Much of the design and content of RedPlum is written for women by women, from snippets about trends to advice for buying flat-screen televisions. “Our target market kept repeating, ‘Don’t write for men,’” said Brian Costello, the general manager for interactive media at Valassis. “Women buy differently, and we wanted to reflect their needs and wants.” One big customer of Valassis, Domino’s Pizza, is enthusiastic about Red-Plum. “We think RedPlum will be the onestop shop for consumers looking for value coupons online,” said Rob Weisberg, a vice president for marketing at Domino’s. “It’s a great opportunity to ultimately have a relationship where we are willing to pay more for prominent placement and target the exact customer we are looking for.” Valassis said it hopes RedPlum also will help it gain favor on Wall Street, where its stock price has dropped during the past two years. In early 2006, Valassis settled a complaint by the Federal Trade Commission that it had attempted to collude with News America Marketing, its top rival, to eliminate competition between the two. Under a consent order, Valassis was barred from engaging in similar conduct. Since then, Valassis has filed an antitrust lawsuit against News America, a subsidiary of News Corp. The case is scheduled to be heard in February in federal court in Michigan. Wall Street also questioned Valassis’ $1.2 billion purchase this year of Advo, a direct-mail marketer. Valassis had sued to get out of the acquisition, saying it found problems with Advo’s numbers, but the deal went through. The combined company says it reaches more than 100 million consumers a week — 90 percent of U.S. households — with its newspaper circulars, bags and direct mailings. One Internet analyst, Sucharita Mulpuru of Forrester Research, said she thinks the RedPlum strategy might give Valassis a positive jolt. “Valassis knows their business, they’re just taking it to the next level with RedPlum, which sounds very promising,” she said. “My only question is, why did it take them so long?”