AdverNET '99 COVERAGE: Online Promotions

From: donna stryk <donna.stryk_at_tenagra.com>
Date: Mon 1 Nov 1999 15:56:35 -0600

Here's more coverage of AdverNET '99. Today we'll
take you beyond banner to the wonderful world of
online promotions. Read on to see what the panel
thinks of these alternative solutions.

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Is there a world beyond banner advertising? Beyond click
through rates and cost per thousand negotiations? Guess
what, there is! Online promotions encompass things such as
email marketing, reward programs, and loyalty programs.
These more expensive, but usually more effective advertising
outlets have gained momentum, and rightfully so. In the
third session on the media buying track at AdverNET '99 the
panel of experts discussed how their companies can help
agencies and their clients engage in successful online
promotions.

The first type of online promotion discussed was email
marketing. Louise Price, Marketing Manager at Netcreations
explained the benefits of choosing an opt-in email campaign
as opposed to an opt-out campaign. She said there are three
main reasons to take the opt-in route. First, it is the
only choice if your goal is to build a solid customer base.
Opt-out lists tend to frustrate consumers. According to
Price, the best thing they will do is to ignore the
unsolicited message, but it's possible that they will
retaliate in the form of flame or even a law suit. The
second reason to choose opt-in is that it works. Plain and
simple, Price said that opt-in email produces great results.
Finally, Price said that opt-in email "makes sense." You no
longer have to guess about what consumers want, they tell
you. So, where does Netcreations fit into the picture?
They provide email lists to aid companies in customer
acquisition. The consumers on their lists opt-in to certain
categories and you can market to the categories that best
fit your needs.

Digital Impact also helps companies deliver effective email
marketing campaigns. Once the agency provides the design of
the message and the list, they help you retain current
customers by managing the campaign. Robin Frank, Manager of
the Agency Marketing Program said there are three essentials
to an effective email advertisement. The first thing you
must do is targeting the media to your particular consumer.
Would they prefer text or HTML messages? Do they want an
interactive email or do they want to read all of the
information directly? Even small items such as the use of
clickable text rather than a lengthy URL could help you
deliver the message with more impact. One interesting point
that Frank made was that HTML email gets two to three times
more click-throughs than text emails on average. Secondly,
you must target the content. Your ad should reflect the
disparities across different regions, age groups, or any
other targeting mechanism you feel is relevant. This may
entail simply altering the product choices by region such as
VirtualVineyards.com or implementing collaborative filtering
such as Tower Records. Collaborative filtering involves
things such as what the consumer has purchased or clicked on
previously and the consumer's indicated preferences on any
site surveys or forms. The third thing that helps email
campaigns succeed is careful and accurate tracking and
analysis.

Another email marketing solution that helps to retain
current customers is Responsys.com. They offer training to
agencies to allow them to manage and analyze the campaigns
themselves. Responsys.com will not only train agencies, but
they will also provide an opt-in mailing list for the
campaign. The main difference between them and Digital
Impact is that a Responsys.com customer logs in and makes
changes and ultimately clicks send. Anand Jagannathan,
President and Chief Executive Officer of Digital Impact
informed the group that the rules of online marketing are
changing. E-commerce is growing at a rapid rate. Email is
producing higher click through rates than other online media
have. More and more companies are getting online which
means that consumers are literally one click away from all
of your competitors. The expense of banner advertising
makes it less desirable for branding campaigns. All of
these changes have led to the emphasis on permission
marketing. Permission marketing involves the consumer
allowing you to market to them with items relevant to their
likes and needs. The keys to permission marketing are
personal profiles and trust.

Michael Tuohy, Vice President of Sales at 24/7 Media said
that companies are changing the way they allocate their
marketing dollars. Banner advertising looks like it will
remain at a constant level in terms of dollars spent.
Overall, companies will be increasing their online marketing
budget by cutting back on some traditional advertising.
Tuohy predicts that companies will spend these incremental
funds on email marketing. Traditional direct marketers are
becoming a big segment for 24/7 Media. Tuohy said "they are
more interested in the power of email to get very direct, to
get to the right customer, and to use email as an invitation
to the offer." So, what's next? Marketers are learning how
to control the offer. They learn from one campaign to the
next, making each successive campaign more successful.
Online advertisers are also getting much better about asking
for permission before bombarding consumers.

Finally, the issue of loyalty programs came to us from Julie
Elizabeth Ames, Senior Vice President and General Manager of
Custom Loyalty Networks for Netcentives. The premise of
loyalty programs is that incentives drive behavior. Typical
objectives for this type of campaign are brand awareness,
traffic, product trial, conversion, look-to-buy ratio,
retention, stickiness, and competitive differentiation.
Loyalty programs can produce superb results, but several
criteria should be follow to help the program succeed.
First, you must give out an award that is meaningful to your
particular audience. Second, consumers must have frequent
opportunities to earn points toward the reward. The next
point Ames made was you must only award points for behavior
that is meaningful and valuable to you based on the
objectives of the program. Subsequently, you must allow
consumers to earn incremental awards depending on how often
they come back, in order to encourage repeat traffic.
Another item to consider is that the incentives will only
bring visitors to the site. It is up to the client to make
sure that the content and design of the site appeals to the
audience so that they will stay there once they arrive and
come back again at another time. The last essential
ingredient for a successful loyalty program is effective and
comprehensive security.

Both email marketing and loyalty programs offer an
advertising avenue, which engages the consumer and feels
more personal. On a cost per thousand basis, these media
are more expensive. However, they also allow you to target
your audience better and they produce higher response rates.
Online promotions are definitely something that every
advertiser should consider. They key, once again, is
targeting and knowing which media your audience will respond
to.

We'll have more conference coverage soon. Keep reading the
Online Ads discussion list to see what else happened at
AdverNET '99.

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Received on Mon Nov 01 1999 - 15:56:35 CST