, Catalina Marketing Form Close Alliance

Loyalty marketer has
forged a wide-ranging multi-year deal with offline consumer marketing firm
Catalina Marketing, in which the two
will co-market online and offline direct marketing and loyalty programs.

The deal also calls for the two companies to take equity stakes in one
another. Although the percentages weren’t disclosed, company execs describe
the investments as “substantial.”

The deal teams online marketer, which has 7.1 million members,
with offline player Catalina, which has its coupon printers at check-out
stands in more than 13,100 grocery stores. Both intend to leverage their
relationships to make the partnership beneficial.

“This agreement marks a major move forward in the increasingly important
sector known as clicks and mortar,” said Steve Markowitz chairman and chief
executive officer

“We firmly believe that the future of the Internet will be
one in which major marketers use the medium to cost-effectively make and
manage customer relationships, while driving transactions in the offline

The deal calls for Catalina and to jointly market the online
loyalty program to the clients that use Catalina’s supermarket coupon
printer — more than 150 consumer packaged goods manufacturers. They’ll
also target the supermarkets themselves, so that shoppers could be offered rewards for going to certain supermarkets.

The two companies will integrate’s loyalty program into
Catalina’s SuperMarkets Online and its ValuPage service, building a
co-branded site where users will be encouraged to join the
program. will also extend its own direct marketing product line with a
set of online coupon products jointly developed by and
SuperMarkets Online. These will be marketed to’s client list
of Internet advertisers.

This is’s second supermarket-related move in recent months.
The company recently acquired Alliance Development Group, which operates
credit card rewards programs for the nation’s largest supermarket chains,
Albertsons and The Kroger Company.

“You may ask, why are we so interested in supermarkets?” says Markowitz.
“They’re literally ground zero in the race to reward the consumers, in that
consumers spend roughly a third of their disposable income in the supermarket.” isn’t the only Internet company that’s seen the value of
supermarkets. has been
trumpeting the success of the name-your-price grocery service it launched
in the New York metropolitan area, and it expects to expand that initiative.

Meanwhile, is also experimenting with its own limited launch
with a similar approach, a service being tested in Sacramento. Users are
presented with offers online, which they can redeem at stores when they use
credit cards they’ve previously registered with

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