Experian, Inc. is phasing out the incentive marketing functions of its rewards division, which awarded online consumers with premiums, such as iPods, for trying out advertised merchandise or services.
A change in business climate and poor Web site traffic were the core reasons for shutting down the program, called MetaRewards, a spokesperson for Costa Mesa, CA-based Experian said. Experian acquired MetaRewards for $26 million in 2003.
“When we acquired MetaRewards…it was an entry point into the pay performance and lead-generation market,” said Experian spokesperson Donald Girard. “It was a very effective way to reach a large number of consumers at a very low cost. But the business climate in this space changed dramatically in the last 12 months and we evaluated that change and decided to exit the incentive market and focus on other resources.”
MetaRewards’ incentive Web sites: YourBillsPaid.com, TopTierGifts.com, RewardsVenue.com, NetFlip.com, RewardsGiveaway.com and YourGiftFinder.com recently began posting notices of the termination of the service.
The sites are expected to cease operation by the summer, Girard said.
MetaRewards incentives allowed consumers to earn points for engaging advertised offers from companies such as American Express, Blockbuster, Columbia House, Chase and AT&T. The points could then be redeemed for treats, such as digital cameras, iPods, CDs, TVs and gift cards.
Direct marketers flocked the service to acquire new customers. In its prime, the MetaRewards network was visited by more than 4 million consumers monthly.
The service was a nice vehicle for businesses to get their wares out there by incentivizing consumers to try products or services in exchange for points, Girard said. “But what we’ve seen is a steady erosion of its effectiveness, which was a trigger for us to exit the business,” he said.
According to Email Data Source, New York City, which provides research on e-mail marketing, traffic driven by e-mails to the program’s Web sites plummeted 90% in the last nine months.
But experts believe the program’s decline is not indicative of what others in the market are experiencing.
“There’s nothing wrong with the incentive space,” said Bill McCloskey, CEO Email Data Source. “But if [companies] over use their e-mail list and provide the same kind of tired offers” they are going to suffer.
Incentive programs at Web sites such as Mypoints.com and Coolsavings.com are fairing well, McCloskey noted. The challenge is that consumers could face e-mail burn out from companies who remain status quo, fail to be creative and do not swap out their premiums and offer a fresh mix fast enough, he said.
At that time Ed Ojdana, president of Experian Consumer Direct, was optimistic.
“This new relationship will broaden the distribution channels for some of our credit products and services into the rapidly growing loyalty and rewards space, as well as leverage our direct marketing expertise,” Odjana said in a statement.
For now, Experian’s Girard said the company will continue to analyze the incentive market and will remain “open to look at new and inviting opportunities to invest in.”
MetaRewards will continue to operate its membership clubs, credit card marketing and comparison shopping sites like Lowermybills.com.