Weak Economy Spurs Coupon Craze

BOSTON (TheStreet) — With consumers increasingly clipping coupons to save money, businesses are looking to cash in on their frugality.

Shoppers saved $600 million more in the first nine months this year than a year earlier, a 30% increase, according to NCH Marketing Services, a subsidiary of Valassis Communications (Stock Quote: VCI), a media and marketing services company that owns RedPlum.com, a popular coupon resource. Coupon distribution by makers of consumer packaged goods rose 11% to 231 billion coupons.

Among the popular sites vying for prominence in the online coupon market are RetailMeNot.com, BradsDeals.com, Savings.com and CouponCabin.com. Lesser-known sites seeking to draw away market share are 8coupons.com, a mobile coupon platform for small businesses; MoneyMailer.com, a coupon search engine that was named Entrepreneur Magazine's top advertising services franchise for 2009; CouponCabin.com, a site that provides both printable coupons and online coupon codes; and PricesandCoupons.com, a service that integrates price comparison with coupon codes.

"Redemption did not start to increase until the fourth quarter of 2008, following the financial crisis that began in September 2008," says Charlie Brown, vice president of marketing for NCH. "Since then, redemption volumes have consistently been up throughout 2009 due to dramatically changed consumer shopping behavior with coupons."

Demand for coupons has increased tension among the top companies in the space.

This past summer, Valassis won a $300 million verdict against News America Marketing (NAM), a subsidiary of the Rupert Murdoch-owned News Corp.. It accused the coupon powerhouse of trying to monopolize supermarket advertising.

In July, following the verdict in Michigan's Wayne County Circuit Court, NAM president Chris Mixson said the decision "rewards a company that turned to litigation as its business strategy rather than compete." He said evidence barred by the court would have made a case that Valassis tried "to induce collusion when it announced its new pricing policy in a public investor call."

"This information would have shown that this lawsuit was merely part of a larger strategy to get News America Marketing to raise its prices, a move that would have affected both our clients and their consumers by reducing the number of coupons available," he wrote.