Most acquisitions are designed to fuel growth. At the same time, many acquisitions are designed to create efficiencies and cost savings by eliminating redundant employees and infrastructure as the two businesses are merged.

But not always.

Here's another in my series where I pick a topic and connect with someone a lot smarter than me. (There's a list of previous installments at the end of this article.)

This time I talked with Michael Vivio, president of Cox Target Media (the owners of Valpak, the blue envelope folks), which acquired the online coupon website Savings.com in June. 

Even though Valpak and Savings.com are both in the "coupon" business they have very different models and customer bases. Walk me through the acquisition reasoning.

We saw the acquisition as a way to grow our core business in a meaningful way.

The Valpak model is based on targeted marketing using a traditional print-based delivery. Its DNA is primarily local, providing a different mix of coupons based on location, demographics, etc.

The DNA of Savings.com, on the other hand, is national and digital. There's very little overlap even though they are, generally speaking, the same kinds of businesses.

We saw a tremendous opportunity--not just in the content we can access but also because the business models provide us the opportunity to be innovative and do something no one else in traditional media is doing.

But aren't the business models really different?

Valpak, like traditional media, is a pay-in-advance model: The advertiser pays for an ad and we distribute that ad in a targeted way distributed.

Savings.com gets a commission when they drive sales to a national retailer. If they provide a coupon code they get a commission. There are no advance payments.

The opportunity for Valpak is to use our very efficient distribution system and introduce that type of monetization scheme into traditional media. Our initial successes have been with national brands that haven't been in the blue envelope because of the previously intensely local focus. For example, Macy's was not a Valpak customer. Macy's is a Savings.com customer, and now we can test them in our print model.

The same is true for Savings.com. They had mostly national advertisers, and very few local.

Now we can keep both brands distinct--but make them both better.

Every time I've ever been around an acquisition the buyers are excited and the acquired are worried about the future of their jobs. How have you dealt with that?

That hasn't been a problem at all. The two companies can still rock along doing what is in their core. For most employees it's business as usual, just with a fun twist. The synergy overlap doesn't affect large numbers of the employees--a small team is working on those kinds of opportunities.

Many acquisitions are seen as a way to "buy" customers, and you certainly gained a lot. But I'm sure there is more.

We also got technology. Our goal is to have our content anywhere at any time. Increasingly that is becoming a mobile proposition.

We're steering towards a mobile future because it makes so much sense in terms of the user experience. For example, our integration with Apple Passbook brings functionality to the concept of a mobile wallet and points to a very strong future in mobile couponing.

Say I have a mobile coupon and go to the Valpak app and save it to Apple Passbook. When I'm near that store I get a notification that I have a coupon or that it might be expiring. Geo-location and all the other functions of a mobile phone make the experience.

That's perfect for us, because local coupons are the coupons people want, and local targeting is in our DNA. So mobile technology only adds to the convenience for the consumer and the impact for the advertiser.

Doesn't the shift to mobile concern you, though? That will be very different for your Valpak franchisees.

I don't worry about being a traditional company embracing a digital future, because it's really not about paper or print--it all comes down targeting. Our franchisees are experts in targeted marketing. They know their communities. They know their customers. That's what makes them successful. The delivery methods may change and evolve, but it's still all based on effective targeting.

And now our franchisees can work with the local pizza shop all the way up to national retailers. In that sense we have become soup to nuts and can deliver in the ways that are most convenient for our customers.

Do you worry about the future of print coupons, and by extension the print side of Valpak?

It's not paper that is in danger, it's trying to be all things to all people that is in danger.

Does it make sense for a diaper company to send out 100 million coupons in Sunday papers for the 2 million people who have babies under 1 year old? If you're a national drug store, doesn't it make sense to distribute within two miles of each of your locations?

Targeting is everything, whether in print or online. Then you have to be able to distribute that targeted message as efficiently as possible.

That's what we do. That's why we acquired Savings.com--because now we can do it even better.

Check out other articles in this series: