Off-the-Rack: Web Programs

They’ll help you sample, coupon, run sweeps, or do direct response on the Internet. We’ll help you find out how they work and what to know before hiring them.

It’s okay. You can admit it. You’re worried that your brand is seriously lacking an Internet presence. You hook into AOL and see your competitor taunting you with special-offer banner ads and start ticking off in your mind what FSIs and cable TV spots you can pull back to finance your launch into cyberspace.

Maybe you’ve held back because it’s too early in the game. There’s no established track record for brands marketing on the Net and there are too few consumers online. Maybe your boss is rooted in the old world and won’t allow you to so much as interview a Web page designer until you’ve guaranteed ROI every which way from Sunday. Maybe you’re moving canned soup or boxed cereal and wonder whether this non-intrusive medium can pay for you. Or maybe things are moving so fast, new technologies and opportunities presenting themselves with such regularity that you just don’t know when or where to start.

If that’s the way you feel, then you should stop hesitating, because the plus side of marketing on the Internet is that you can dip your toes in and get a quick read on results without putting much of a dent in the budget. Over the past few years, off-the-rack tactical services have sprung up to allow you to do sampling (FreeSampleClub.com), loyalty programs (MyPoints.com), couponing (SuperMarkets Online), scratch-and-win games (RealTime Media), and sweeps (Webstakes). Most of these services are soup-to-nuts, offering creative, database management, results reporting, and even fulfillment. And most can give you a taste of their Web magic for $10,000 or less.

Some of the biggest users of these services, in fact, are e-businesses that have the people and the technological wherewithal to do it for themselves if they wanted to. “The thing is, our business changes daily and weekly, and few e-commerce companies have the people or the time to implement [Web marketing initiatives] quickly,” says Eric Schaefer, director of marketing communications for AutoByTel.com, an online distributor of new and used cars, auto insurance, and car maintenance services with a network of 3,000 dealers. The company runs a regular program on Webstakes to generate site traffic and transactions.

“We have the resources to build this if we want,” says Schaefer, “but Webstakes is ready to go. It was literally a matter of weeks from concept to live.”

As with anything new, however, buyers must beware. “It’s not difficult for entrepreneurial promotion people to get in the Internet business and create promotional tactics. Half of the ones who’ve tried so far are out of business already,” says Paul Ivans, president of DVCi, a Morristown, NJ, Web marketing agency and consultant. “That’s not to say they’re not good. If you want to market on the Web you’ve got to have tactics available, and they’re providing tactics.”

Before choosing an off-the-rack Web provider, consider the following:

People: Make sure your Internet partner is staffed not just with techno-wizards, but with experienced marketing practitioners as well. Many services floated off into the ether because they were hawking technologies, not solutions.

Clients: Ask how to access their systems online, and see who is already doing business with them. Check with current clients to see how long they’ve been using them and to determine their track records of service and results.

Standards: Find out if the provider has signed on with industry standards of ethical practices, such as opt-in capture of personal information (in which the consumer proactively offers himself for list inclusion) versus opt-out (in which personal information is captured and distributed unless the consumer tells a service not to). “Companies not respecting opt-in go out of business,” says Schaefer. “It’s very easy for customers to smear your name online.”

Openness: Be wary of services that are not forthcoming with references and costs. They could be hiding a lack of track record. In compiling the Web Marketing Services Guide that follows this story, promo faxed 130 companies, inviting them to send us their particulars for inclusion. Only 75 faxes went through (verifications of Ivans’s estimated failure rate?), and only 10 responded with the information necessary to make the list, most of them established services. Some of these, however, declined to reveal costs.

Financial stability: Who are their investors? “You want their backers to be the same people who invested in Amazon.com,” says Ivans. “Watch out for the guys looking to get enough customers to do an IPO so they can cash out of the business.”

Here’s a rundown of some some of the companies leading the way in transferring offline promotion tactics to the Internet.

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SuperMarkets Online: Due to the fraud implications of consumers being able to print out coupons on the home desktop printer, online coupon services have been wrestling with various systems and procedures since they first ventured out into cyberspace five or six years ago. This Catalina Marketing division has developed a totally safe system, though, like the St. Petersburg, FL, company’s Checkout Coupon program, the values are delivered after the shopper has paid the cashier.

Of course, this hasn’t stopped Checkout Coupon from becoming a constant cash register companion in some 12,000 supermarkets across the country. And Supermarkets Online, which operates through the same network of computers and printers, is up and running in 11,000 of them, making it one of the few Web marketing services offering both critical mass and national coverage. Director of the service David Rochon claims that 900,000 people click onto Supermarkets Online each week.

“We are AOL’s coupon button,” says Rochon. “There are 18 million people on AOL, and people who go to their Best Food Wednesday site and click the Values button get to us.”

Those who do are asked for a Zip Code and then sent to a site customized for their section of the country, where they pick from a list of participating retailers that include names such as Kroger, Stop & Shop, and Dominick’s. Consumers click on the coupons they want and print out a bar code from their computers. It is scanned at checkout, and the Catalina computer produces a Web Buck coupon totaling discounts offered by the purchased products. Shoppers can redeem the coupon toward the purchase of any items on a return visit.

Though Supermarkets Online’s system forces consumers to come back to the store to get their values, they don’t seem to be protesting. Rochon claims a redemption rate in excess of 70 percent. Retailers embrace the program for its ability to create loyal customers, and clients (who include General Mills, Kraft, Pepsi, and Nestle) are charged based on a program’s performance.

Clients can make special appeals through an e-mail service, using a version of Catalina’s Checkout Direct program to tailor offers based on purchase behavior. They can also sample by asking consumers to enter their names and addresses online and sending them trial sizes, or by printing out Web Bucks good for full-size products.

FreeSampleClub.com: Sampling veterans at The Sunflower Group in Overland Park, KS, haven’t made as much headway as Catalina has with its Internet venture. Programming problems got the two-year-old FreeSampleClub off to a slow start, but it looks to build capacity with the transfer of its platform to an Internet service provider in Silicon Valley. Visitors to the site have largely been delivered by word of mouth, and current members total only 100,000. But Sunflower Interactive president Mark Siebert looks for a media campaign to build membership beyond the million-mark in the next 18 months.

Visitors to FreeSampleClub.com are asked for basic demographic information, as well as lifestyle questions such as “Do you own dogs?” They are then presented with relevant category questionnaires, asking their preferences among several brands as well as usage habits.

Clients can program the delivery of samples based on consumers’ usage of competitive products, or simply based on target demographics. Total cost of delivering samples comes to less than $1 per household.

FreeSampleClub offers an e-mail service that brands can use to send invitations to targeted lists, though, as is the case with most of these Web marketing services, clients cannot gain direct access to the database.

One thing that could be holding down the numbers on the club is the price – in time – of entry for members. While the detailed questionnaires provide minute information to marketers, they take a long time to complete. Click-happy Web surfers may not find single-use samples worth the effort, though Siebert insists the survey completion rate is 50 percent.

Opt-out no-no: A paragraph at the bottom of the site’s first screen requires visitors to “uncheck” a box if they want FreeSampleClub to remove their Web addresses from an e-mail distribution list.

Webstakes: It raised more than $50 million in an IPO and lists investors the likes of Allen & Co. and NBC. Still, many observers sniff that that’s chump change for a Web stock offering, and that the Webstakes site is naught but an online sweepstakes newsletter. But ceo and co-founder Steve Krein envisions his company becoming the pre-eminent Internet marketing provider.

“We’re going to expand beyond sweepstakes and into all the tools used out in the real world,” he says. “Our goal is to be a full-service promotion company, offering everything from concept to fulfillment.”

Another Webstakes investor is Excite@Home, and banners on Excite help deliver surfers to the company’s site, where thousands of potential prizes await.

Once there, consumers are presented with a list of product categories ranging from automobiles to electronics to computers. Under each category is a listing of prizes available in sweepstakes being run under the heading. Directions ask the consumer to click on a category he or she is interested in, the wisdom being that people are most likely to pick a category that they are currently shopping or have an abiding interest in.

Once clicked into a category, consumers are asked to pick the prize they’d like to win. Above the prizes are banners for four or five site sponsors. When the consumer clicks on one of them and is delivered to the particular sponsor’s site, he or she is asked for further information and entered into the sweeps. A button on the home page entitled “Meet our 6,400 Winners” assures visitors the payoffs are real.

Webstakes has no lack of name clients, having helped The Sharper Image integrate promotions with its stores and catalogs and Juicy Fruit provide sweeps to teens by getting permission for entry from their parents.

“Privacy is a gigantic issue on the Net,” says Krein. “One of the great services we provide is ensuring clients we are already abiding by what’s going to be required by Congress within the next 12 months.”

Krein also says Web-stakes is configured to aid Internet marketers on whatever level they desire, from total program management down to the leasing of its iDialog technology for use on brands’ own Web sites.

“You can spend $10,000 with us or $100,000,” he says. “We want to be our clients’ partner on the Web.”

MyPoints.com: A promotion-based brainstorm called frequent-flier miles achieved such popularity that it now represents a new American currency. So why wouldn’t the same method work online? It would, and it does.

MyPoints.com offers brands a low-cost solution to online purchase motivation in the same way the airlines do – present significant awards, but require a consistent history of brand loyalty among network members to earn them.

Brands can employ MyPoints on their own sites through a co-branded loyalty program, and can run special offers on MyPoints.com with hot links. Budget-wise, the system offers great flexibility, since it is up to the individual brand how many points it wants to award to consumers buying in on an offer. BonusMail e-mails that go out to members – who detail their lifestyle interests in a questionnaire – also drive surfers to sponsor sites. Members get an automatic 10 points for responding, with further rewards for action at the discretion of the brand. MyPoints executives say marketers can hook into their service for as little as $2,000 a month.

Marketers who want to create their own, brand-exclusive loyalty program can do so through a “private label” plan in which MyPoints helps them set up shop using its existing technology and reward systems.

The MyPoints system is especially popular with e-commerce concerns such as eBay and Fool.com, but also sports clients such as Sprint and GTE.

RealTime Media: Back in the ’60s, an entrepreneur by the name of Jack Seidman revolutionized instant-win offers and ensured a future of well-heeled state lottery commissions with the introduction of Rub ‘N Win gamepieces. Now his son Charles, along with partner Bob Auxier, is reaping the benefits online with digital versions of scratch-and-wins.

Clients including First USA, Reader’s Digest, and Discover Network have made use of RealTime’s cursor-scratch gamepieces to drive traffic to sites or reward consumers who fill out questionnairesonline. The Wynnewood, PA, company offers syndicated promos that brands can buy into, or it will create custom devices.

Through Lycos, NFL.com recently used RealTime technology to capture thousands of fan dossiers for its e-mail database. In questionnaires, fans were asked to name their favorite teams, and that team’s logo and colors festooned the gamepiece that appeared at the conclusion of the survey. Grand prize: a trip to Super Bowl XXXIV.

Like most games, contests, and sweeps-oriented services, RealTime provides fulfillment services.

There are hundreds more marketing suppliers populating the Internet, and all demand a thorough checking before being employed. No matter which ones you choose to partner with, no matter how good their track records or financial conditions, make sure the services they provide mesh with your overall strategic plan.

“Before you jump onto the Internet, you need to sit down with your staff, decide what you want to accomplish, and then carefully consider the services that can give you what you want,” counsels DVCi’s Ivans. “These companies provide needed services, but most of them are still tactics in search of a strategy.”