EVENTS & PROMOTIONS;ONLINE GOLD MINE AWAITS EXPLOITATION;BUT CREATIVE, SETUP COSTS SLOW CONTEST, COUPON, REBATE EFFORTS

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Cross the growing use of the Internet with the lure of free prizes, and you get the booming business of online promotions.

At one point, interactive media observers believed electronic retailing would bring consumers online. However, the rush to buy through cyberspace never materialized, as consumers expressed security concerns over sending data electronically.

But marketers, especially those in high-tech businesses like electronic gaming, are bringing consumers into cyberspace through online promotions, a field that was practically nonexistent six months ago.

FREEBIES ONLINE

Most online promotions fall into one of three categories: sweepstakes, contests where quizzes or surveys are filled out in exchange for prizes, and coupon and rebate promotions, which haven't really caught on yet because of a fear of fraud and bad positioning, says John Uppgren, VP-technology marketing at consultancy Gage Marketing Group.

Cyber-promotions give Internet surfers a chance to win free merchandise. Marketers can use these programs-which Mr. Uppgren says can cost anywhere from $5,000 to $50,000, excluding prizes-to create and strengthen ties with consumers by drawing Web site visitors and recording demographic data.

"We can do lots of fun things with online promotions that can't be done with print media," says Kate Rogers, publicity manager of Sendai Media Group, whose titles include several electronic gaming magazines.

NUKE POWER

Sendai's Web site Nuke Internetwork (http://www.nuke.com) contains the subject matter found in four of Sendai's magazines. There are tips, tricks, previews and reviews for videogames and computer games, as well as information on action sci-fi movies, comics and trading cards.

Online promotions also let marketers show off their technical expertise-an important consideration in high-tech businesses like electronic gaming.

"We try to cater to our audience, which is always looking for challenges and the coolest and most innovative technology," says Mike Riley, exec VP at Sendai.

Sendai, which receives 1 million hits a week on its Web site, will launch a seven-week online-only contest on March 15 with card game creator Wizards of the Coast.

In scavenger-hunt style, participants will search for clues in seven different puzzles, with a new puzzle appearing each week. The grand prize winner will receive a laptop computer.

Sega of America, meanwhile, uses its Sega Online Web site (http://www.segaoa.com) for a variety of different game promotions, including sites specifically created to introduce new characters to the public.

"We devoted an entire site to [the new game character] Bug when he first appeared so that players could see his personality" and listen in on his remarks, says Aimee Cardwell, producer of Sega Online. "These types of promotions are paramount for building character recognition."

Sega, whose home page averages 250,000 hits a day, also runs a variety of other promotions including supplying Web surfers with the opportunity to download games.

"Our promotions draw more people to the site and add excitement so people come back again and again," says Dan Stevens, Sega's corporate PR manager.

Adding to this excitement is the contention by some that the chances of winning a cybercontest are better than in print contests.

"Odds of winning on the Internet are great because not too many people are visiting Web sites," says Robert McKim, founder of M/S Database Marketing.

However, long-term survival of a site depends on a lot more than just Web traffic.

"A predominant number of chance promotions, like sweepstakes, have been about driving hits and views and pulling people to the page rather than focusing on gathering data," says Mr. Upp-gren. "As time goes on, the promotional universe will change and become more targeted."

A well-executed promotion in Mr. Uppgren's opinion was one conducted last October for Quaker Oats Co.'s Gatorade sports drink. Participants were asked to answer a few questions in exchange for a free T-shirt.

The program worked, Mr. Uppgren says, because it created product loyalty and helped the marketer understand its customers.

Like any type of product, promotions also need advertising so Web surfers know something's up at a particular site. The promotion should be actively supported as part of an overall marketing mix. Otherwise, it can sit inside a Web site and go unnoticed.

One way to garner attention is to cross-promote with other Web sites. Last November, Sega bought a banner on Netscape and saw its hits jump by about 15%. When the banner was removed, the number of hits returned to normal.

"There are over 10,000 Web sites in the world," Mr. McKim says. "You have to make people to want to go to yours."

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