MyPoints.com, Catalina Marketing Form Close Alliance

Loyalty marketer MyPoints.com 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 MyPoints.com, 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 of MyPoints.com.

“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 world.”

The deal calls for Catalina and MyPoints.com 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 MyPoints.com rewards for going to certain supermarkets.

The two companies will integrate MyPoints.com’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 MyPoints.com program.

MyPoints.com will also extend its own direct marketing product line with a set of online coupon products jointly developed by MyPoints.com and SuperMarkets Online. These will be marketed to MyPoints.com’s client list of Internet advertisers.

This is MyPoints.com’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.”

MyPoints.com isn’t the only Internet company that’s seen the value of supermarkets. Priceline.com 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, MyPoints.com 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 MyPoints.com.

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