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Digital Coupons Represent Fastest Growing Coupon Segment in 2010

MOUNTAIN VIEW, Calif. - (BUSINESS WIRE) - Following recent research demonstrating coupon distribution in the U.S. increased 6.8 percent in 2010 and that more coupons were distributed during the year than ever before,¹ Coupons.com Incorporated today issued its Digital Coupons Trends Report for 2010, releasing data about consumer use of digital coupons aggregated from the Coupons.com digital coupon network. As the largest digital coupon network on the Web, comprised of Coupons.com as well as thousands of independent partners, the Coupons.com network is representative of the digital coupon industry overall.

The Trend Report indicates that more than $1.2 billion in digital coupons savings was issued in 2010, representing a 41 percent growth over the year before. Compared to growth metrics for coupons distributed in newspapers of 7 percent, digital coupons dramatically outpaced the growth of their newspaper counterparts, approximately 6 to 1.² The report also includes data on user demographics, popular coupon categories and top couponing U.S. cities. Also announced today is Coupons.com Incorporated's business report for 2010 titled "Coupons.com Issues More than $1.2 Billion in Digital Coupon Savings in 2010; New Consumer Products and Expanded Distribution, Staff and Offices Enable Growth."

"Online savings as an industry is growing at a frenzied pace, and the digital coupons space is no exception." said Steven Boal, CEO of Coupons.com Incorporated. "More and more consumers are making digital coupons a part of their shopping routine, accessing them across the entire digital domain-including the Web, in social media, with consumer electronics, via their mobile phones, etcetera. At the same time, brand marketers are increasingly engaging with consumers via digital offers, wanting to influence shoppers throughout their path to purchase."

2010 User Demographics: Coupons are High Brow!

Recent data shows that users of digital coupons have higher household incomes and are better educated than users of newspaper coupons and the general population overall, dispelling the perceived low-brow stigma of couponing.

The consumer who prints digital coupons has an average household income of $105,000, a 26 percent higher income level than the U.S. average. 36 percent of those who use digital coupons have a college degree, compared to 28 percent of those who use newspaper coupons and 26 percent of the general populace.³

Interestingly, adults with household income of over $100,000 are twice as likely to have redeemed coupons printed from an online source than adults with household income less than $35,000.⁴ Also, adults with college degrees are almost twice as likely to have used coupons in the prior six months as those who didn't graduate from high school.⁵

Coupon Usage by Product Category: Cereal Leads the Way

Cereal was by far the most popular coupon category in 2010, followed by Yogurt (No. 2), Refrigerated Dough (No. 3), Portable Snacks (No. 4), and Vegetables (No. 5). Baby Products: Other, including bottles, car seats and diaper pails, also topped the list at No. 6, followed by Soup (No. 7), Air, Rug & Fabric Care (No. 8), Cheese (No. 9) and Lunch Meats (No. 10).

Category		Rank
Ready to Eat Cereal		1
Yogurt		2
Refrigerated Dough		3
Portable Snacks		4
Vegetables		5
Baby Products: Other		6
Soup		7
Air, Rug & Fabric Care		8
Cheese		9
Lunch Meats		10

Table 1: Top Categories

Increasingly, consumers are taking advantage of mobile devices to access, print and save coupons. The top categories for coupons accessed via mobile applications, including Coupons.com and Grocery iQ, are Ready to Eat Cereal (No. 1), Yogurt (No. 2), Refrigerated Dough (No. 3), Portable Snacks (No. 4), Vegetables (No. 5), Air, Rug & Fabric Care (No. 6), Baby Needs: Other (No. 7), Dinner: Multi-Serve (No. 8), Lunch Meats (No. 9), and Nutritional Snacks (No. 10).

Category		Rank
Ready to Eat Cereal		1
Yogurt		2
Refrigerated Dough		3
Portable Snacks		4
Vegetables		5
Air, Rug & Fabric Care		6
Baby Products: Other		7
Dinner: Multi-Serve		8
Lunch Meats		9
Nutritional Snacks		10

Table 2: Top Categories Accessed via Mobile Apps

Coupon Usage by City: Atlanta Holds Its Own

For the second year in a row, Atlanta takes the top spot on the Most Frugal U.S. Cities list for 2010, according to Coupons.com's Savings Index.⁶ On average, regular users of Coupons.com in Atlanta printed or saved to a loyalty card more than $1000.00 dollars in coupon savings from the site in 2010. That is almost twice the amount of savings in 2009, during which time Coupons.com users printed or saved to loyalty card $531 in savings.

The Top 20 couponing cities for 2010 are Atlanta (No. 1), Tampa (No. 2), Cincinnati (No. 3), St. Louis (No. 4), Minneapolis (No. 5), Charlotte (No. 6), Nashville (No. 7), Cleveland (No. 8), Pittsburgh (No. 9), Raleigh (No. 10), Kansas City (No. 11), Washington DC (No. 12), Miami (No. 13), Dallas (No. 14), Oklahoma City (No. 15), Boston (No. 16), Denver (No. 17), Seattle (No. 18), Columbus (No. 19), and Wichita (No. 20).

The South is big on savings: more than one-third of the top 20 frugal cities are in the Southern region of the United States.

Once again, Ohio is the country's most frugal state. The Buckeye state is represented three times in the top 20. North Carolina is Ohio's biggest challenger, with two cities in the top 10.

Seattle advanced the most, up 5 positions, to the No. 18 spot on the list.

2010 Rank		Change Since 2009		City		State		Savings Index
1		-		Atlanta		GA		997
2		-		Tampa		FL		569
3		-		Cincinnati		OH		497
4		-		St. Louis		MO		420
5		-		Minneapolis		MN		329
6		↑ 1		Charlotte		NC		303
7		↓ 1		Nashville		TN		291
8		-		Cleveland		OH		289
9		-		Pittsburgh		PA		250
10		↑ 1		Raleigh		NC		235
11		↓ 1		Kansas City		MO		233
12		↑ 3		Washington		DC		207
13		↓ 1		Miami		FL		202
14		↑ 4		Dallas		TX		198
15		↓ 2		Oklahoma City		OK		198
16		↓ 4		Boston		MA		192
17		-		Denver		CO		170
18		↑ 5		Seattle		WA		153
19		↑ 1		Columbus		OH		147
20		↓ 1		Wichita		KS		146

Table 3: Top 20 Frugal U.S. Cities

Coupon access via mobile device varies by city regardless of their position on the overall Most Frugal Cities List. Savers in Oklahoma City, New Orleans, Las Vegas and Philadelphia are quick to look to their mobile device to maximize savings and advance on the On-the-Go list relative to their position on the Most Frugal U.S. Cities list, while Minneapolis, Cleveland and Seattle were lower on the On-the-Go list relative to their position on the Most Frugal U.S. Cities list.

Top 20 Most On-the-Go Frugal Coupon Cities are Atlanta (No. 1), Tampa (No. 2), St. Louis (No. 3), Cincinnati (No. 4), Oklahoma City (No. 5), Dallas (No. 6), Charlotte (No. 7), Pittsburgh (No. 8), Tulsa (No. 9), Miami (No. 10), Minneapolis (No. 11), Washington DC (No. 12), Nashville (No. 13), Raleigh (No. 14), Wichita (No. 15), Kansas City (No. 16), New Orleans (No. 17), Cleveland (No. 18), Denver (No. 19), and Memphis (No. 20).

2010 Rank		City		State		Savings Index
1		Atlanta		GA		906
2		Tampa		FL		531
3		St. Louis		MO		490
4		Cincinnati		OH		374
5		Oklahoma City		OK		363
6		Dallas		TX		282
7		Charlotte		NC		280
8		Pittsburgh		PA		246
9		Tulsa		OK		241
10		Miami		FL		238
11		Minneapolis		MN		235
12		Washington		DC		232
13		Nashville		TN		226
14		Raleigh		NC		222
15		Wichita		KS		219
16		Kansas City		MO		214
17		New Orleans		LA		198
18		Cleveland		OH		196
19		Denver		CO		177
20		Memphis		TN		165

Table 4: Top Frugal U.S. Cities - Mobile

Increased Consumer Interest: Coupons Speak Up in the Consumer Vernacular

Representing over 16 percent of the U.S. population, more than 49 million American consumers are now using online coupons, up from 45 million in 2009.⁷ Of the 49 million online coupon users, almost one-third (14.8 million) has not read or looked into the Sunday newspaper within the prior six months, a 13 percent increase over 13.1 million in 2008.⁸

Research also indicates 73 percent of all U.S. shoppers have used online printable Web coupons to date.⁹

Additionally, reflective of trends in the consumer vernacular, Internet queries for coupons and related terms increased significantly on search engines during the year. Specifically, searches on Google for "Digital Coupons" and "Printable Coupons" increased 200 and 170 percent, respectively.¹⁰

Outlook for Digital Coupons

Weak economic conditions have been a primary factor driving the use of coupons overall. U.S. consumers appear to have an insatiable desire for deals and savings, as is evident by the increased popularity of the broad range of saving offers, such as digital coupons, daily deals, flash buying and online coupon codes. Consumer interest in savings is expected to remain steadfast regardless of economic recovery signs, with many reports predicting that buyer behavior around savings is here to stay. In fact, research consistently shows that even when economic conditions improve, 8 out of 10 U.S. adults plan to continue to engage in couponing activities.¹¹

In addition, food prices are predicted to rise during 2011, putting pressure on consumer budgets while, at the same time, driving manufacturers to use creative vehicles to move product off the shelves.

Other factors influencing the growth of digital coupons include increased Internet and mobile adoption by consumers, increased comfort with technology by mainstream consumers, and decreasing reach of traditional newspapers. Digital coupons are expected to continue to show up in new places across the digital domain, including social media, consumer electronics, home appliances and in-store kiosks and shopping carts.

In the longer term, with changes expected at point-of-sale checkout with new technologies like RFID (radio frequency identification) and NFC (near field communications) and increased use of mobile apps, coupons will be saved to mobile devices and redeemed without the actual scanning of the mobile screen. U.S. penetration of smart phones is expected to exceed basic phones (i.e. "feature" phones) in by the end of 2011.¹²

"With the continuing weakened economy, growing online and mobile access by consumers, an increasingly deals-oriented society and rising food prices, we expect consumers will increasingly look to digital coupons as an effective means to cut costs and save money," said Boal. "We will continue to be aggressive in delivering coupons at every turn across the digital landscape-especially social media—and continue to innovate with digital coupon solutions to connect brands with shoppers throughout their path to purchase."

About Coupons Incorporated

Coupons.com Incorporated is the recognized leader in digital coupons, including online printable, save to loyalty card and mobile promotions. For consumers, the company's products include Coupons.com, the 51^st largest Web property and No. 1 in the Coupons/Rewards category in the U.S. ^†, as well as Grocery iQ and Coupons.com mobile applications. For brand marketers, the company distributes digital coupons to millions of consumers through Coupons.com and thousands of Web sites comprising the Coupons.com digital coupon network. The company also powers digital coupon initiatives in 1-to-1 online marketing campaigns-including display advertising, email and social media programs. For publishers, the company offers solutions to monetize Web site traffic, including branded microsites, and Brandcaster, a self-service coupons syndication platform. Clients include hundreds of top consumer packaged goods brands (including Clorox, General Mills, Johnson & Johnson, Kellogg's, Kimberly-Clark, and Kraft Foods), leading restaurant, toy and entertainment companies, as well as top retailers (such as A&P, CVS, Duane Reade, H-E-B, Kmart, Kroger, Safeway and Walgreens). Founded in 1998, the company is based in Mountain View, CA. To start printing coupons, visit www.coupons.com. To learn more about the company visit www.couponsinc.com.

† Nielsen, October 2010

Data not otherwise cited is Coupons.com internal data.

¹ NCH Marketing Services Inc., Coupon Facts Report, 2011; 6.8 percent increase represents 332 billion coupons distributed in 2010

² Kantar Media, Press Release, January 5, 2011

³ Simmons Market Research, Summer 2010

⁴ Survey conducted by Harris Interactive on behalf of Coupons.com. All data collection was done by telephone within the United States from March 5-8, 2010.

⁵ Survey conducted by Harris Interactive on behalf of Coupons.com. All data collection was done by telephone within the United States from March 5-8, 2010.

⁶ Savings Index ranks cities (with a population of 300,000 or more) based on each city's total printed coupon savings on Coupons.com and the Coupons.com network in 2010 relative to its population size. With an index of 997, Atlanta residents are ten times more likely to print coupon savings than the average American city dweller, as shown in Table 3.

⁷ Simmons Market Research, Summer 2010 and Summer 2009

⁸ Simmons Market Research, Summer 2010 and Summer 2009

⁹ In-Store Marketing Institute, Clicking Through the Path to Purchase: Best Practices in Digital Shopper Marketing, conducted by Catapult and Ipsos OTX, September 1, 2010

¹⁰ Google Insights for Search, for U.S. searches during the period beginning January 3, 2010 and ending January 1, 2011

¹¹ Survey conducted by Harris Interactive on behalf of Coupons.com. All data collection was done by telephone within the United States from March 5-8, 2010.

¹² Nielsen, nielsenwire blog, March, 26, 2010

Coupons.com Incorporated
Patrick Crisp, 650-605-4695
patrick@coupons.com