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Coupon industry drops mailing levels but redemption increases

LONDON - The number of promotional coupons in the UK being sent by direct mail services has dropped to less than 60% in the last year, but levels of redemption have increased to 16%, according to research.

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A report by Valassis found that out of the 3.47bn coupons distributed by marketers in the UK in the last 12 months, those sent by direct mail had dropped to 58% from last year's all-time high of 70%.

Meanwhile, magazines, which are the second most popular medium for sending coupons, increased its share by 50% year-on-year to 15%.

Valassis said falling levels of direct marketing usage coincided with a "significant increase" in redemption levels to 16% -- the highest rate for any medium in the promotional coupon industry. The average level across all industries is 10.2%.

Direct marketing's fall in numbers and rise in redemption rates is being interpreted by Valassis as evidence of increasingly successful target marketing campaigns, which have forced down the amount of mail needing to be sent.

The of internet distributed coupons, which make up a marginal 0.12% of all methods of promotional coupon distribution, has doubled since 2006.

The Valassis study, which monitors success rates for redemption rates across 95% of the UK sector, also found in-store promotion, the third most popular medium, had risen by around 1.5% to 6%, while newspapers experienced a marginal 0.4% decrease from last year's figures to 6.02%.

The newspaper industry came top for the sector that receives the most amount of promotional coupon campaigns, with "money off when you spend" coming second, retailer specific campaigns in third and still soft drinks in fourth.

Ming Blackburn, marketing manager at Valassis, said: "Since this drop in DM's market share was accompanied by a significant increase in redemption levels, it is logical to assume that more accurate targeting is generating this dual affect."

She said that the magazine industry's gain "can be attributed at least in part to the growth of retailer magazines."

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