Oh, Goodies: Sampling sites woo packaged goods brands with data and demos.

Online sampling heats up this month when startsampling.com and sampleville.com begin pitching their sites to packaged goods companies.

Start Sampling – in test since March ’99 – launches with $12 million in funding from Japanese Internet investor Softbank. The site joins a growing list of at least a half-dozen sampling sites including freeshop.com, freesampleclub.com, and samples4free.com.

If these sites can deliver on promises of high conversion and heavy consumer feedback, traditional sampling companies will feel the pinch – or feel compelled to join the fray. Sites rushing to sign qualified consumers will spend this year jockeying for preferred status among CPGs. They’ll also have to prove they can reach consumers as well or better than intercept and in-home sampling.

Start Sampling claims it can target consumers more efficiently than traditional methods or other sites. Shoppers register by giving demographic information to tailor the offers they’ll see on-screen. A limited number of samples are “flighted” – flagged on-screen during specific day-parts, targeted by demographics and geography. Shoppers get samples first come, first served, and each is mailed solo within 48 hours of request.

Limiting supply in an auction-like atmosphere “keeps people coming back,” says president-ceo Larry Burns. “They want to be the first on their block to have it.”

It also keeps fulfillment manageable. Start Sampling’s warehouse in Carol Stream, IL, handles 30,000 samples a day. As the company expands, it’ll outsource to the preferred vendors of packaged goods companies, and may expand its center.

Start Sampling has 100,000 registered subscribers and projects five million by the end of 2001 (it has been adding 2,000 per week). Each household can choose only one sample a day. That boosts Start Sampling’s “cost-per-conversion rate,” Burns contends, because shoppers have to really want a product to make it their only pick for the day. Start Sampling tracks conversion three ways: It gives shoppers frequent-flier miles when they mail in UPCs of items they bought after sampling; tracks sales via online grocers; and is talking with bricks-and-mortar stores to track sales via loyalty-card data. Start Sampling claims conversion rates up to 30 percent for candy and gum. Brands participating in the test include Wrigley, Dentyne, Lipton, and Aquafresh.

Samples under three ounces cost 70 cents to 75 cents apiece, including postage, a profile of those who requested them, and their feedback. Shoppers get “frequent-tryer miles” for visiting, choosing samples, offering feedback, referring friends, and giving more data on their media and shopping habits. Miles are good for a limited number of CDs, books, videos, software, TVs, and DVD players, first-come first-served.

Feedback and follow-up closes the loop and “gives the brand more of a life cycle with consumers,” says Amy Baker, ceo of charter advertiser Nature’s Cure, Oakland, CA. “They’re a little too tight with consumer data, though. Companies giving samples should get names, addresses, and e-mail. That’s the beauty of [online sampling] for brand managers: the chance to follow up.”

Sampleville this month launches a new version of its three-month-old site and starts wooing marketers. Parent Archegenesis, New York City, collected 65,000 subscribers in six weeks on the promise of one-stop shopping for samples. The company plans to add consumer incentives to bump up its reported 40-percent return rate, and provide feedback for marketers.

That’s a bennie marketers like, along with demographic targeting that posts offers only on the screens of shoppers who meet criteria set by the brand. Watch for sites to set more incentives for shopper feedback (see sidebar).

Major CPGs often prefer to sample via their brands’ own sites. Procter & Gamble checked out sampling sites a year ago, but chose instead to use its own. “We were worried about consumers just looking for samples, and not really caring about the brands,” says digital research manager Jon Mamela. P&G integrated sampling into each brand’s online marketing, and last summer set up an intranet site to train brand managers to do sampling on their own. Target Base, Dallas, handles fulfillment and evaluation.