Average FSI value increased in 2006.

The Marx Promotion Intelligence FSI Trend reports that during the first six months of 2006, Free Standing Insert (FSI) average face value increased 8.6 percent to $1.18 vs. the same period in 2005. It is the largest average face value for a half year period on record. This trend is being driven primarily by the expanded use of FSI coupons for high-value products which are increasingly being added to the grocery channel. Face values for high-value products averaged $4.07 during the first half of 2006, up 20% from the same period in 2005.

The Marx FSI Trend Report is issued by Marx Promotion Intelligence, a division of TNS Media Intelligence. Marx Promotion Intelligence is considered the industry standard for tracking FSI coupon activity.

“Marketers continue to leverage FSIs to provide impression value and reach while delivering consumer incentive and brand messaging,” said Mark Nesbitt, chief operating officer, Marx Promotion Intelligence/ TNS Media Intelligence. “However, it is evident that high-value consumer promotions have emerged as an effective tactic as innovative new products are introduced and traditional retail channels continue to blur.”

-High value products using FSIs include many personal care items and household cleaning products. Examples include:

-Teeth whitening kits (Colgate Simply White® Crest® Night Effects™ and Crest Whitestrips®)

-Diabetes care (OneTouch® Blood Glucose Monitoring System)

-Portable air treatment systems (Febreze® ScentStories™, Air Wick FreshMatic™, Glade® Wisp®)

-Disposable toilet cleaning systems (Clorox® Toilet Wand™, Scrubbing Bubbles® Fresh Brush™)

Non-Food vs. Food Segments

In the first half of 2006, average face values of coupons rose 10.9 percent across all Non-Food segments, versus same period 2005. The Household Products segment led this trend with a 22.0 percent increase to $1.11 driven by expanded activity in support of high-value products. Coupons dropped for Non-Food items decreased 2.7 percent versus the record levels observed in the first half of 2005. Personal Care and Household Products segments had slight increases in coupon distribution of 0.4 percent and 0.3 percent respectively, while the Health Care segment had a decrease of 7.9 percent.

Average face values of coupons among Food categories rose 2.2 percent to $0.82, led by Refrigerated Foods with an 8.2 percent increase to $0.74. The Cereals segment countered with a 7.1 percent decline to $0.83.

Coupons dropped for Food items decreased 6.5 percent versus the record levels observed last year, although Refrigerated Foods had a 3.9 percent increase in coupon circulation.

The top 10 coupon product types accounted for 32.1 percent of all coupons distributed. Rug/Room Deodorizers led the top 10 with an increase of 24.8 percent, due to the increasingly competitive Air Treatments segment.

Overall FSI Activity

During the first half of 2006, more than 130 billion coupons were delivered via Free Standing Inserts (FSIs) in Sunday newspapers, down 4.2 percent from the same period in 2005, which was the most active six-month period on record for FSI activity. This decrease in coupons corresponds with a 2.2 percent decrease in total pages. As noted, average face values had an 8.6 percent increase due to an increase in support for high-value items. Finally, after increasing slightly in 2005, the average offer duration returned to its historical trend toward shorter promotion periods with a 3.3 percent decrease to 10.3 weeks. These trends indicate that manufacturers are continuing to leverage FSIs, but increasingly use them to deliver high-value offers that encourage brand trial and generate category excitement.

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