Electronic greetings competition intensifies

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Regularly ranked as one of the top 10 commerce sites on the Web, Blue Mountain Arts.com doesn't sell a single thing. Until now.

While Blue Mountain says it doesn't plan to charge for its electronic greeting cards, last week it did start accepting its first ads. It also plans to build a shopping area on the site by the end of the year, selling complementary greeting card products such as gifts.

Separately, rival electronic greeting site E-greetings Network today names Butler, Shine & Stern, Sausalito, Calif., its agency of record for a $2 million consumer campaign.

As for the first advertisers on Blue Mountain, the site wouldn't disclose names, saying ads are being tested and that it's working on finalizing longer-term sponsorship deals.

"We're looking to monetize the value of the site in a strategic way," said Karen Davidson, VP-marketing and sales, noting that the site received 4.2 million unique users in September, according to Media Metrix.


The online arm of the Blue Mountain Arts card company in Boulder, Colo., the site has grown entirely by word of mouth: It has not done any banner ads or promotions--not even a URL posted on the back of a card. Users find out about the site by receiving a notice to pick up an animated greeting there.

All of which is why the ads will be on on the confirmation page that appears after someone has sent a greeting, said Ms. Davidson, so as not to disrupt the flow of the site, which has been free of commerce for its two-year existence.

"We're looking for strategic partners who fit contextually with sending a card," she said.

The online greeting space is small. Jupiter Communications clumps cards under specialty gifts, a category including wine and flowers that's projected to reach $219 million in 1998. Yet it's growing fast with offline companies battling for brand share. Last December, Hallmark Cards and American Greetings Corp. expanded their sites in time for the holidays.

Online-only greetings company E-greetings, San Francisco, is also about to rev up its online marketing. Formerly known as Greet Street, the site named Butler its agency for a consumer print campaign, expected to start by yearend and go through mid 1999.

E-greetings picked Butler after reviewing two other unnamed agencies.

President Tony Levitan, who co-founded the company with Fred Campbell, said Butler won the account on the merits of its speculative campaigns and work for Miller's Outpost and Borders. Butler will also handle advertising and marketing of E-greetings' site. The rest will be handled in-house.


"Consumers for the most part don't know about us yet," said Mr. Levitan, adding that the campaign will employ humor to increase brand awareness. In September,

E-greetings reported its logs counted nearly 3 million unique visits, which Mr. Levitan said is up from 750,000 unique visits in January.

The big difference between Blue Mountain and other sites such as E-greetings is the cost of the cards. E-greetings has free and advertising-sponsored cards, but charges for its top-line animated cards. Blue Mountain will use advertising and eventually commerce distribution deals for revenue.

Asked whether E-greetings is moving to a free model, Mr. Levitan said, "There's going to be some changes in our strategies" and to expect a lot more e-greetings on its site.


James McQuivey, analyst, Forrester Research, said he thinks there's a niche market for people who will pay for an electronic greeting. Yet, he asks: "Can [E-greetings] get the momentum that Blue Mountain Arts has with a paid model? I don't think so."

Blue Mountain got into the business because the founders are artists who wanted to write poetry, Mr. McQuivey said. "Anyone else in the world would have started charging for that a long time ago."

By accepting e-commerce, Blue Mountain has to be careful not to disturb the emotional attachment consumers have with the brand.

Not only are the cards free, the style of the site is very low-pressure, he said. All that could be disrupted if "they start cramming business offers" on the site.

Copyright October 1998, Crain Communications Inc.

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