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Online promos more sophisticated, successful

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There’s still a fair share of marketers who unselectively bombard Internet users with banners that advertise things like a chance to win a snazzy new car or a trip to Barbados. However, most online promotions in both the business-to-consumer and b-to-b arenas have become more sophisticated and increasingly more subtle.

"The technology has been available for a while," said Gary Stein, marketing and advertising analyst for Jupiter Research. "It’s just that marketing efforts are now catching up with it."

This includes the wealth of customer information marketers are beginning to leverage through their corporate enterprise systems, especially their customer relationship management suites. Such data allow marketers to build on previous promotions and foster strong relationships. In fact, one savvy vendor has added another acronym to the CRM lexicon in hopes it will transform marketers’ and customers’ perception of Web-based sweepstakes, lotteries and "advergames."

‘IRM’ reflects evolution

"We call it incentive relationship marketing, or IRM," said Josh Linkner, founder and CEO of Detroit-based ePrize L.L.C., which operates as both platform provider and creative agency for its clients. "We believe it reflects an evolution in thinking about and executing online promotions."

Key to that evolution is transforming an isolated moment of interest into outright loyalty by stringing relevant, interactive promotions together, Stein said. "You build interest and gain information about a prospective customer with an initial effort, then follow that up with increasing incentives to purchase your product or service," he explained. "Hopefully you’ll [provide incentive for] repeated purchases that will turn into brand loyalty."

EPrize said it has been very successful in building Internet-based promotion platforms that turn "spikes and tails"—the cycle of a typical one-time promotion, where interest spikes shortly after the promotion runs but tails off later—into long-term relationships. The company has amassed more than 650 campaigns with major brand advertisers, including b-to-b players Verizon Communications, MasterCard, CDW Computer Centers Inc., Siemens, Pitney Bowes and Palm Inc.

Generally speaking, the more sophisticated a promotion is, the better the results, Linkner said. EPrize offers three basic levels of promotions that ratchet up the incentive and interaction: The first level is a simple sweepstakes, "equivalent to putting your business card in a fishbowl at a convention," Linkner said. It attracts some initial interest, especially if the prize is something expensive or exciting. But too often it’s seen as a gimmick and rather commonplace.

The second level is an instant-win or similar game, usually directing prospects to a special Web site where marketing messages accompany the chance to win prizes. "Games add more interaction and begin building a relationship between the marketer and a potential customer," Linkner said.

He said that in a recent internal study of clients’ campaigns, ePrize found a 149% increase in opt-ins when jumping from a sweepstakes to an instant-win game. At the same time, the cost per registrant dropped 34%, he said.

Level three takes a game and customizes it for marketers, "using their products, services or brand as an integral part of the game itself, giving the promotion direct and immediate context," Linkner said.

However, with any advergame, Stein warned, "you have to be careful that customers don’t become loyal to the game itself and completely tune out your message."

Providing long-term value

Other vendors, such as Cariocas Inc. of San Francisco, are pushing the proverbial envelope on both technology and meaningful interactions. "The company has a fascinating promotions platform based on game theory that lays out a long-term interaction path that’s fun, insightful and more involving," Stein said. "I think we’ll see promotional platforms such as those from Cariocas and ePrize develop rapidly and be applicable to clients ranging from McDonald’s to Microsoft."

Top promotional firms have been very successful in adapting flashy b-to-c concepts to the more conservative business world. EPrize, for example, recently designed a kitschy e-decoder instant-win game for Verizon. In effect, it used the Internet to take the old cereal box toy to its ultimate conclusion, and it scored the telecommunications provider many new small-business customers.

In the b-to-b space, however, online promotions are not all fun and games.

"I think the long-term trend will be to offer relevant, value-added business content as an incentive, rather than prizes," said Bill McGee, senior VP-general manger for SFInteractive, a San Francisco-based marketing agency. "Instead of a luxury car or a vacation, we [as an agency] are taking the approach of offering valuable white papers, return on investment calculators and other content that’s of immediate business use to prospective customers."

SFInteractive has worked with clients such as Cisco Systems Inc. to build sponsored content areas on Web sites that "go way beyond advertorials, actually providing useful information on very specific topics," McGee said. "What’s perhaps even more important is that we’re reaching prospective customers in venues they’ll go to for information farther along in the decision-making process, meaning we’ve already qualified them."

Too much waste

McGee believes many online promotions create a lot of waste because they’re too broad and unselective.

"The bottom line is promotions need proper placement and a high premium incentive for executives to give up their work e-mail, which is often what you really want," he said.

The clincher for McGee is that with this approach to promotions (unlike most sweepstakes and instant-win games), everybody who participates wins a valuable, if not exactly tangible, prize. And it’s often a prize that people are encouraged to share with their colleagues, giving marketers a free viral component to their campaigns.

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