WEB COUPON SERVICE SETS UP NEWSPAPER NETWORK

AMANDA WEEKES

SAN DIEGO -- Though they may not have noticed, many retailers nationwide have begun accepting coupons downloaded from the Internet with newspaper URL identifications printed on them.

Those coupons are the result of a new service called Boodle, created by Consumer Networks here, which allows consumers to download free coupons from their local newspaper's Web site. Linked to over 250 newspapers throughout the country, Boodle said it provides a different way for shoppers to find coupons online, in addition to retailer, manufacturer and third-party sites.

Launched in June, Boodle now offers over 70 coupons online from such consumer packaged goods companies as General Mills, SC Johnson, Kimberly-Clark, Novartis and General Electric. Banner advertising on a newspaper's Web site invites consumers to click on a link that takes them to Boodle's coupon selection. Consumers are also told about the coupons through advertisements in the print edition of the newspaper.

"In any given marketplace, the newspaper's Web site is the No. 1 local site because that's where the information is, that's where the news is," said Les Howe, chief executive officer, Consumer Networks. "So we went to where the traffic was, as opposed to trying to drive traffic to our Web site." Participating newspapers include Newsday, covering Long Island, N.Y.; The Daily News-Sun, Phoenix; and The Journal-Courier, Jacksonville, Ill.

Redemption of its online coupons range between 10% and 20%, depending on category, compared with the 1% rate for coupons from print freestanding inserts, according to a Boodle spokeswoman. Repeat users make up 50% of the total. Online newspaper readers visit their local newspaper sites up to four times a week and 38% visit several times a day, according to the Newspaper Association of America.

The spokeswoman said Boodle is aiming for between 30 million and 40 million coupon downloads, but did not indicate when that goal was expected to be reached.

Much like a traditional FSI company, Boodle acts as the liaison between the newspapers and the CPG companies. The CPGs pay Boodle for every coupon that is printed, and Boodle in turn pays a portion to the newspaper. Boodle would like to eventually offer retailer-specific coupons.

Each coupon section contains the newspaper's branding and can be personalized for a region, though most of the newspaper coupon sections currently contain the same basic information.

Boodle has the ability to change the contents of a coupon during a promotion, switching a discount from 75 cents to 50 cents almost immediately. "It gives the CPGs the tremendous ability to manage their promotion dollars," said Howe. "If they are getting a huge success out of a coupon offer that is 75 cents then they can lower it to 50 cents to see what they get. Instead of putting it out and hoping it works, they get to manage it as they go through the campaign."

Some retailers have declined to accept Internet coupons because of incidents of fraud. However, since policy changes were adopted by the eBay auction site regarding coupon transactions, the percentage of retailers accepting Internet coupons has grown, said Heather Harde, senior vice president, business strategy and development, SmartSource Online Savings Network, New York (SN, Nov 1, 2004).

Boodle has attempted to alleviate retailers' concerns by encrypting its coupons with serialized bar codes, setting a cap on distribution qualities and forcing consumers to print coupons in color.

Many retailers have also adopted a coupon policy to prevent fraud. Wal-Mart Stores' coupon policy states that coupons must have a scannable bar code, an expiration date, say "Manufacturer Coupon" and be an original copy, said Sharon Weber, spokeswoman for Wal-Mart. The retailer also limits one coupon per customer and requires that a valid remit address for the manufacturer appear on the coupon.

"We accept legitimate coupons whether they come from the Internet or the newspaper," said Weber.