Green stamps hit the Web in e-mail incentive programs

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ClickRewards
Background: Netcentives is a year-old San Francisco start-up with $12 million in venture capital. It's planning to launch the ClickRewards program by December..
How it works: Users are rewarded for visiting an advertiser's Web site, participating in market research surveys or buying something online. Users can swap ClickRewards points for frequent flier miles, or use them to upgrade a hotel room or rental cars. Other ways to redeem ClickRewards are being planned. Netcentives e-mails consumers with special promotional offers.
Advertisers:

CNET's Buy Direct, Internet Shopping Network's First Auction, GolfWeb, Macy's, Broderbund Software, Burke Marketing Research and Yahoo!.

Redemption
Partners:

American Airlines, British Airways, Continental Airlines, Delta Air Lines, Northwest Airlines, US Airways, National Car Rental System, Marriott Hotel & Resorts, Westin Hotels & Resorts.

Distribution: Co-branded deals are planned with Broderbund and other partners. Frankel & Co., Chicago, and Highway One Communications, San Francisco, are promotional marketing partners.
Prognosis: Netcentives has exclusive three-to five-year relationships with its airline partners to exchange ClickRewards for miles online. (Since Netcentives signed its deal with American, other programs are blocked from purchasing any more American miles, the airline said. Incentive programs are still able to purchase airline ticket certificates.)

All told, Netcentives said that its roundup of airlines represents 80% of the 52 million frequent flier members in the country, a demographic that overlaps with many of the people on the Internet. However, Netcentives is getting a late start, having already delayed a September launch date. It must hit the ground sprinting with wide brand exposure if it wants to gain marketers' attention and consumers' eyeballs.

e-centives
Background: Emaginet, Washington, was founded in 1996 and is planning to launch its e-centives program at Internet World Dec. 8. It has raised $11 million in equity.
How it works: Emaginet requires consumers to download an "Organizer" software application to their desktop, which allows users to define what types of e-centive coupons and promotions they want to receive. A smaller version of the Organizer is also available in Java. Emaginet is targeting advertisers, who often double as redeemers, in categories such as computers, travel and automotive. Users can also earn e-centives at participating Web sites, banner ads or have them pushed directly to the e-centives Organizer.

Participating sponsors must buy Emaginet's server for $10,000.

Advertisers:

SkyMall, an airline catalog company, and Choice Hotels..

Redemption
Partners:

Same as advertisers.

Distribution: It is planning co-branding with its marketers and an online marketing campaign in 1998.
Prognosis: Getting consumers to download the Emaginet Organizer will be difficult, so redemption possibilities will have to make it worthwhile. Emaginet said it's close to signing deals with marketers from various categories.

BonusMail
Background: Intellipost Corp. San Francisco, draws on a strong background in direct marketing and $17 million in venture capital. It launched BonusMail commercially last August. So far, 150,000 consumers have signed up for the service, and Intellipost CEO Steve Markowitz expects to have 1 million signed up by April 1998.
How it works: For every BonusMail promotion users open, read and respond to, they are awarded Rewards credits, which can be redeemed by any of the off- or online redemption partners in the program. Intellipost charges more than $300 per thousand impressions.
Advertisers:

3DO, GE Capital, Autodesk, CBS Sportsline, Newsweek, Forbes, AdOne Classified Network and CUC International, among others.

Redemption
Partners:

American Airlines, MCI Communications Corp., Boston Market, Red Lobster, General Cinema, 1-800-FLOWERS, Virtual Vineyards, B. Dalton Bookseller, Barnes & Noble, Spiegel, Target Stores, The Gap, CBS Sportsline and Tower Records, among others.

Distribution: Intellipost advertises on all the major free e-mail services, including Rocket Mail, USA.Net and HotMail, and is in negotiations with Microsoft Corp. for an advertising deal.
Prognosis: BonusMail has the biggest lineup of redemption partners and the largest subscriber base. It needs to build a mass audience of users to succeed.

MyPoints
Background: MotivationNet, Schaumburg, Ill., is backed by direct marketing giant Direct Marketing Technology. MyPoints, Universal Rewards Currency went into beta last October and is planning a full launch this January.
How it works: Consumers register for the service and are sent e-mail promotions based on their preferences. They can also earn points by clicking on ad banners labeled with a MyPoints U.R.C. code, or by participating in offline loyalty and incentive programs. Consumers can cash in MyPoints online or offline for prizes offered by redemption partners.

Advertisers pay $16,000 for every million points they buy to issue to consumers.

Advertisers:

Alexa Internet, Go 2 What's New, Meals.com, Hello Direct*, Cool Savings*, International Gaming Network*

*Is also a redemption partner

Redemption
Partners:
American Airlines, Carnival Cruise Lines, Corporate Sports Incentives, Edmund Scientific, Marriott Hotels, Overton's, United Airlines,
Distribution: Online ad campaign to be launched Nov. 16 with some 10 million ad banners on sites including Lycos, GTE, Travelocity and Excite. MyPoints will also be offering its service to 200,000 consumers on opt-in e-mail lists, including other incentive programs.

Prognosis: While it has a low profile, MotivationNet is well connected with the direct marketing industry and has extensive backend systems in place. Consumers, for example, can check their MyPoint balances online and redeem points instantly. MotivationNet can also earn revenue by running companies' private online incentive programs, or by issuing MyPoints for existing, offline loyalty programs. The challenge will be in building brand awareness and picking the redemption and marketing partners.

Virtually nonexistent a year ago, Internet incentive programs are quickly populating the Internet.

About $144.5 billion was spent on traditional direct marketing in '96, according to the Direct Marketing Association. (In comparison, Jupiter Communications estimates that $300 million was spent on banner ads last year.)

REDEMPTION VARIES WIDELY

So for marketers that have had to rely on "snail mail," e-mail is a fast, cost-effective way to sell their wares and build customer loyalty. A slew of programs have appeared with various degrees of redemption possibilities and marketing partners. Most of the programs reward customers with points if they agree to receive ads. A user can earn even more points if he or she participates in a survey or buys something from an offer.

But how these programs will pan out is uncertain because they are so new. Intellipost Corp.'s BonusMail launched commercially last August and counts 150,000 consumers in its service. Meanwhile, the MyPoints program from MotivationNet, the ClickRewards program from Netcentives and the e-centives program from Emaginet are all planning official launches by mid-January.

Not all Internet incentive programs use a points system. CyberGold for instance, gives consumers cash or credit on their credit cards for viewing ads, but said push isn't in its paradigm right now.

Online sweepstakes companies Yoyodyne Entertainment and NetStakes leave reimbursement up to marketers and use e-mail to update consumers about promotions.

But as David Carlick's short-lived e-mail shopping service, Power-Agent, learned the hard way, one-to-one Web marketing needs a transfusion of cash and multiple revenue streams to survive until mass consumers find their way online. Here's a sampling of some of the incentive programs.

Copyright November 1997, Crain Communications Inc.

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