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Will Digital Coupons Be the Death Knell of the Printed Newspaper?

We all know that print media is struggling. Newspapers are closing up shop, and those that stay afloat are cutting staff members in staggering numbers. Ad revenue keeps newspapers afloat, and free-standing inserts (FSIs) make up between 30% and 50% of this critical income source depending on the season and market of the newspaper. FSIs include both printed ad circulars and coupon inserts.

The rise of couponing without newspapers

Currently, 90% of coupons are still sourced via print, but digital coupon technology is on the rise and once consumers make the inevitable switch away from paper, what will keep newspapers afloat? For now, online coupons are offered directly by retailers and manufacturers. But for the broadest array of digital deals, consumers look to third party sites that specialize in issuing coupon codes, offer printable coupons or apps that allow for seamless paper redemption.

These are driven by coupon aggregator applications which can draw from many manufacturer offerings. The appeal of third party sites is obvious – rather than resorting to visiting the site of each brand or retailer, you can view them all. It's a one stop shop for deals. Printing coupons at home is not the future – consumers may find they're paying as much in ink and paper than they would to buy a Sunday paper.

The upside to going all-digital with coupons is obvious from the consumer side. Digital redemption allows consumers to skip the cost of buying a $3-$6 Sunday paper, forgo time spent clipping and the hassle of hauling coupons to the store (or worse yet, realizing they forgot their coupons). Plus total digital integration allows consumers to search for coupons while in the store aisles. Print coupons (even self-serve print services) do not allow for on-the-fly savings opportunities.

How the recession saved newspapers (at least for a while)

Print newspapers scored a giant reprieve when the recession hit. Because of the explosion of interest in savings and shows like Extreme Couponing that encouraged clipping to score deep discounts, print newspapers saw significant growth in sales. But once the economy limped toward recovery, the interest in devoting hours of time each week to couponing waned.

Those print media outlets that enjoyed profits buoyed by consumers purchasing multiple copies of Sunday papers per household to maximize access to coupons now saw circulation numbers dive sharply. Rick Edmonds of The Poynter Institute, a non-profit school for journalism says, “The super-couponing craze, at its peak in the spring and summer of 2011, has run its course. The phenomenon of coupon enthusiasts buying multiple copies to increase savings has waned or stopped.”

Go digital or die is the mandate for newspapers

Those newspapers that survive must adapt to the digital world. The New York Times is one of the few print papers that has successfully delved into digital by establishing a paywall – but they had the cachet to pull it off. For most print publications, demanding cash to browse their digital pages won't work when the Internet is rife with reputable free news sources. Offering digital coupons may help news outlets shift to online iteration.

Whether or not newspapers embrace digital coupons, consumers will continue to move in this direction.  The popularity of discount purchase sites like Groupon, the fastest growing company in history, is teaching consumers to use their smart phones to access discounts and redeem digitally without interacting without any paper being involved.

Another upside to digital coupons and online promo codes is that they can be linked to store savings cards, rebates and benevolent giving programs. Some third party aggregators allow shoppers to choose a charitable organization to benefit when the consumer uses designated coupon codes – and that's a benefit that paper coupons just can't match.

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