But after the two-month promotion, 3Com clinched four times as many sales as expected, with more orders coming in. The campaign was so successful, three other 3Com divisions have signed up for similar promotions.
What made it work so well? Instead of simply buying banner advertising and opt-in e-mail and hoping for a return, 3Com invested in a service that took it from production of creative to tracking its return on investment.
ROI is theme for '90s
"Return on investment is definitely a theme for the '90s," says Chris Peterson, president of Times Direct Marketing, San Francisco, which created 3Com's campaign.
Special software allows Times Direct to analyze the performance of online ads and easily change banners, e-mail, Web sites and media buys based on performance.
Using banner advertising on sites such as News.com, ZDNet.com and PCWorld.com and targeted e-mail, 3Com targeted corporate information systems managers and network personnel.
The company ran a sweepstakes featuring a vintage Corvette grand prize. To enter, users clicked on the banner or e-mail hot link, which took them to a satellite site created for the contest. There, they filled out a questionnaire about their work and Internet background.
14% response rate
Trish Yoskovitch, 3Com's division manager for advertising and direct marketing, said the effort drew a 14% response rate to the e-mail and a $5 cost per lead for buying sites. She also said 3Com has seen a 6% to 43% conversion rate from the various ad buys.
"It would have been good at a 4% response," Ms. Yoskovitch said of the e-mail response. "We would have been thrilled with an 8 to 10% response."
3Com then created a database of the respondents and categorized them as good, mediocre and poor sales leads, and turned over names to its sales force for follow-up.
Behind the scenes, Times Direct was busy analyzing users' response rates to the banner creative, to the satellite site and to each ad buy.
After a week or so of the promotion, the team was able to analyze which combinations worked and which didn't, and then adjust the creative, the site and the ad buys.
Seeing what works best
If one of three banners rotating on a site worked best, that banner replaced the others. If the site seemed to target a younger audience, but was actually pulling an older audience, the site was changed.
If ad buys didn't draw respondents, the buy was stopped. In fact, the real-time analysis of the data gives Times Direct ability to make some unorthodox ad buys -- in two-week increments instead of the traditional nine-week cycle.
Times Direct determines the performance of the ad buy by analyzing click-throughs and conversion rates, and continues worthy campaigns and dumps the rest.
While the advertising industry has clamored about the need for higher click-through rates on banner ads, little has been said about the next logical steps in the sales chain -- the conversion rate and return on investment.
That's because the technology hasn't caught up with the interactive promise of the Internet and the ability to calculate such figures efficiently -- until now, Mr. Peterson says.
"We turn the campaign into a dynamic campaign and report on it hour by hour. We analyze it to see if we need to change things in the campaign to boost the overall performance," he says. "How we define performance is click-through rate and conversion rate."
While similar to direct marketing, Mr. Peterson says the Web already is showing strengths over other advertising media, particularly with its real-time reporting capabilities.
But online marketing still has a way to go.
"It's another example on how the Web is just in its infancy," says Ken Lim, senior analyst for CyberMedia Convergence Consulting, Cupertino, Calif. "What [Times Direct] is doing is new to the Web, but it's a more common value-added feature that direct marketers do in non-Web venues.
"In direct advertising, that's the way it ought to be done. If you're going to go to the trouble of tracking it, track it all the way to the sale," Mr. Lim says.