First Half 2005 Most Active Half Year Period For FSI Coupons.

The Marx FSI Trend Report issued reports that during the first six months of 2005, more than 136 billion coupons were delivered via Free Standing Inserts (FSIs) in Sunday newspapers, up 2.3 percent from the same period one year ago. That is the largest number of FSI coupons distributed in any half year since 1995, when Marx Promotion Intelligence began tracking the FSI industry.

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.

FSIs saw growth in two other key measures: total pages increased 5.9 percent and average coupon face values grew 6.7 percent, to $1.09. Additionally, the average offer duration, which has trended downward over the past several years, increased to 10.6 weeks. These increases indicate that more manufacturers are using FSIs, and that when they do, they are enticing consumers with increasingly attractive promotions.

“The key metrics for the FSI show a medium in full-growth mode,” said Mark Nesbitt, Chief Operating Officer at Marx Promotion Intelligence/ TNS Media Intelligence. “As marketers assess different media, they are finding FSIs provide impression value and reach, while delivering consumer incentive and brand messaging.”

Sector Activity

The Consumer Packaged Goods (CPG) sector remains the largest user of FSI pages and posted a 3.4 percent increase in page activity through the first half of 2005. The Direct Response and Franchise sectors also posted positive growth. Direct Response, which includes general advertising activity, has been increasing in activity steadily for the past three years. In the Franchise sector, distributed page increases were driven in part by chain restaurants such as Quizno’s, Sweet Tomatoes and Pizza Hut and in part by strong increases from ice cream chains such as Cold Stone Creamery and Baskin-Robbins.

CPG Non Food vs. Food

In the first half of 2005, coupons for Non-Food items increased 11.8 percent. Two segments saw double digit increases in coupons dropped versus the same period in 2004: Personal Care, up 15.7 percent, and Health Care, which increased 11.8 percent. Conversely, Food item coupons declined 7.9 percent. Activity in Dry Grocery, the largest segment of the Food sector, declined 10.9 percent due to decreases in the Candy and Soup categories.

Average face values of coupons rose in both the Non-Food and Food segments. Non-Food average face values increased 4 percent, to $1.31, while the average face value of Food items increased 5.3 percent, to $.80. The largest increases were in Household Products, up 11.5 percent, Shelf Stable Beverages, up 6.7 percent, and Dry Grocery, up 6.6 percent.

Top 10 FSI Coupon Categories in First Half 2005*

Among the top 10 categories, Household Cleaning Products dropped the most coupons in first half 2005, over 7 billion, and posted an increase of 15.0 percent. Eight of the top 10 categories posted increases, lead by Vitamins, up 41.1 percent, and Rug/Room Deodorizer, up 23.1 percent.

*Coupons Distributed equals the actual number of coupons distributed in FSI inserts.

Top 10 FSI Coupon Growth Categories in First Half 2005

Significant increases in coupon distribution were noticed across a broad range of categories. The Gum and Foot Care categories surged 150 percent and 130 percent, respectively. Continuing its strong growth from last year, the Vitamins category had the largest increase in coupons dropped, up 1.2 billion to nearly 4.3 billion overall. The Personal Care segment had 4 categories among the top 10, including Foot Care, Shaving Cream/Razor, AP/Deodorant and Hand & Body.

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