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Giant coupon company to come out of merger

Thursday - 6/21/2012, 9:13am  ET

By TAMARA LUSH
Associated Press

ST. PETERSBURG, Fla. (AP) - Coupon-clippers, take note.

The company that owns and distributes Valpak coupons to millions of homes around the U.S. is acquiring one of the biggest online coupon websites. Cox Target Media Inc., told The Associated Press it is acquiring Savings.com and its British- based sister site, Savoo.co.uk.

"What it means for the Valpak brand ... that blue envelope that's so familiar? It's going to make that experience better," said Michael Vivio, the president of Cox Target Media, which is based in Largo, Fla.

Vivio said Wednesday that in the future, customers that receive local deals in the Valpak coupon envelope will also get them from national brands. Eventually, the deals will also be available on a phone app and through other social media sites. Company officials say the acquisition expands both Valpak and the website to encompass traditional, digital, social and mobile platforms.

The acquisition means a shift in the advertising revenue model, Vivio said.

Valpak makes money in a traditional, print media way, he said: businesses pay for the ads in advance and hope there's a corresponding sales bump.

With affiliate marketing sites like Savings.com, Vivio said, the business model is different. Companies send the affiliate marketing sites coupon codes or data feeds to sites that drive traffic to their websites. When a transaction is completed, the company pays a commission to the affiliate site _ meaning the company doesn't spend a dime until a customer buys something.

"The acquisition of Savings.com creates a new business model," said Vivio. "(Companies) will be able to get the eyeballs and mass reach print delivers using the kind of business model that works in affiliate marketing."

A company spokesman said the acquisition cost about $100 million.

Loren Bendele, CEO of the Los Angeles-based Savings.com, said his company won't make the move to Florida.

In 2011, the two companies teamed up to provide online coupons from national retailers on Valpak.com.

"This acquisition gives us a much deeper relationship," said Bendele. "In the past, they took some of our content displayed it on their website. This allows us to get in the envelope and work with our merchant partners and distribute deals through the envelope."

Because Valpak "hyperlocalizes" its direct marketing deals, Bendele said Savings.com will add the social media and Internet component to those consumers, thus broadening the reach of each company.

Cox Media Group is a broadcasting, publishing, direct marketing and digital media company that distributes Valpak, a leading North American direct marketing company. Cox Media has $1.7 billion in revenue, along with 15 television stations, 86 radio stations, eight daily newspapers and more than 100 digital services.

Valpak is distributed to some 44 million U.S. households monthly.

Savings.com offers in-depth databases of online coupons and personalizes deal recommendations for online visitors. It also gives personalized recommendations and allows people to rate coupons and deals. The company says it has more than 5 million visitors monthly.

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Follow Tamara Lush on Twitter at http://twitter.com/tamaralush.


(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)