Valassis to Stick With "Majority" of Newspapers; Settles Fraser Billing Dispute

Last Updated Mar 27, 2009 12:16 PM EDT

Brian Costello, general manager of Valassis' RedPlum network, gave a little more detail on on whether Valassis will pull more coupons from newspapers this year in favor of shared mail and online downloads.

"It's not the majority" of newspapers, he told the Pontiflex CPL Summit in New York on Thursday. "The majority are still getting free-standing inserts in newspapers."

The problem, he said, is that newspaper circulation is declining to such low levels that clients are asking for new vehicles to deliver coupons.

"Every last one of them has come to us and said newspapers are declining at a massive rate, what else have you got?" Costello said.

He cited the recent disappearances of daily papers, such as those in Seattle and Denver, and the Detroit Free Press reducing the number of days on which it prints.

Costello also addressed Valassis' recent decision to pull coupons from the Cleveland Plain Dealer. That move set off a controversy among coupon cutters, many of whom prefer newspapers over online or shared mail coupons because, by buying multiple papers, the coupons can be doubled up at the checkout.

"Their circulation was declining pretty rapidly," Costello said. By shifting the coupons to shared mail, "they really could cover more of the audience."

"Are they the same coupons? Not always," he said. "Procter & Gamble does no online" coupon efforts because the company is not confident about the technology.

Overall, Costello said, "the companies are looking, where are we not getting the numbers? ... Newspapers are going to be good in some markets and bad in others."

To counter protests from coupon-cutters, Valassis put out a press release March 6:
Recent media reports and coupon enthusiast Web sites have erroneously reported that Valassis is pulling its RedPlum coupon booklet from all newspapers across the United States, when in fact newspapers still represent 90% of its FSI distribution.
Separately: Valassis on March 20 announced it settled litigation with Fraser Papers over an alleged $1 million in unpaid bills. The terms of the settlement were not disclosed.

The statement contained this sentence from Fraser's COO:
"Fraser did not file this case because of any concerns about Valassis' ability to pay," said Jeff Dutton, President and Chief Operating Officer, Fraser Papers.

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