When the largest coupon company in the world cut back on its deliveries in the Los Angeles Times, it was another reflection of advertisers’ waning confidence in the ability of major daily newspapers to get their message to the masses.

Valassis Communications Inc. in Livonia, Mich., announced in August that instead of distributing its insert, called RedPlum, with the Times on weekdays, it will be mailed to Times subscribers. (RedPlum coupons will still be delivered in the Sunday edition of the Times.)

However, the RedPlum coupons will continue to appear in the smaller suburban papers owned by Los Angeles Newspaper Group, both daily and Sundays.

Suzie Brown, chief marketing officer at Valassis, said the decision to drop the Times for distribution was based on audience, not cost-savings.

“It was primarily driven by the fact that newspaper circulation is decreasing while the need for advertisers to get into as many homes as possible is increasing,” she said. “There was a divergence between the Times audience and our advertisers’ needs.”

Meanwhile, use of online coupons is in growth mode, but remains minuscule compared with old-fashioned discounts on paper.

Dean Adams, owner of D.L. Adams & Associates, a newspaper consultancy in Cambridge, Ontario, said Valassis has followed the same pattern in other large cities – namely, dropping distribution in the large metro daily but continuing to use smaller outlying papers.

“Valassis wants to have the best distribution network regardless of media loyalty,” Adams explained. “When you are as big as Valassis, choosing media loyalty becomes an option but not every coupon book or flier has the same financial clout.”

RedPlum distribution is based on geography. Nearly all its advertisers are retailers, so the distribution closely matches the market areas of the big malls, shopping centers and supermarkets.

About 5.2 million households in the L.A. region receive the RedPlum coupon inserts, mostly via mail. About 400,000 households previously received the insert in their Tuesday and Friday Times.

Adams explained that historically, coupon companies preferred to distribute with a paper because advertisers believe consumers pay more attention to ads that come with a paid publication. But as newspaper circulation has waned, that benefit has lost out to the simplicity of the mail system.

Circulation for Sunday papers and local suburban papers has decreased much less than metro dailies, so they remain attractive for coupon companies.

RedPlum will continue to distribute through Los Angeles Newspaper Group because “those 300,000 households match better with our advertisers compared to the Times,” Brown said.

It’s been a hard few years for both the LANG newspapers and the Times, with circulation and ad revenue falling dramatically.

Overall, however, national coupon advertising is thriving.

Brown said redemptions at stores have jumped 20 percent in the last year, and the volume of coupons distributed has increased consistently for the last five quarters.

“The usual consumer behavior during economic tough times is to revert to bargain shopping, and coupons are the medium of choice,” said Adams.

Big Sunday

Gregg Dittoe, managing director of preprint and alternative delivery for the Times, owned by Chicago-based Tribune Co., said that with the cutback on the RedPlum deal, the publisher has switched to a new strategy by sharing coupon inserts in partnerships with the Orange County Register and the Ventura County Star.

“We went from a company-based alliance with Valassis to market-based alliances in Ventura and Orange counties,” he said.

Brown said that the Times Sunday circulation, while declining, is not in the freefall that daily circulation is experiencing.

“It’s still a habit for people to buy the Sunday paper and then organize their shopping for the week,” she said.

For the future, Brown doesn’t see coupons declining in importance; the only question is whether marketers will distribute them in newspapers.

“Newspapers will continue to be strong, but over time they will decline,” she predicted. “Online coupons are growing at a triple-digit rate of increase, but the numbers are very small. I think over time online will grow into another distribution channel,” she said.