CompareNet (www.compare.net), a comparison shopping guide that gets 2 million unique visitors a month through placement on portals including Excite and Snap!, is expanding its sales operations to six executives and beginning a search for a VP-sales.
The San Francisco-based start-up is also introducing a lineup of more than a dozen advertisers, including Audi of America, Volkswagen of America, Mercedes-Benz of North America and Olympus Digital. And on Aug. 1, CompareNet began testing an outdoor board and bus ad campaign in Northern California. Created in-house, ads try to convey that CompareNet can help consumers make informed online-buying decisions. It's also advertising online on Yahoo!, Infoseek and Snap!
"A lot of brand people are worried the Internet will strip the message away from their brand," said Trevor Traina, president of CompareNet, referring to search results listing brands in generic terms.
With CompareNet's Foundation Memberships, advertisers can buy an enhanced listing of their product's features and a direct link to their site. Memberships are usually sold for six months to a year, for an average monthly cost of $10,000.
FINDING PEOPLE IN BUYING MOOD
Thomson Consumer Electronics, which makes electronics equipment, just finished a six-month ad contract on CompareNet for RCA and is considering renewing for another round. "CompareNet does a really good job of bringing us those people who are in the buying mood," said Michael Harmon, manager of interactive marketing.
CompareNet is also able to track its performance. For instance, in-house research showed that before Audi advertised on its site, it was the No. 11 station wagon brand investigated by consumers. After advertising in the month of June, Audi's position rose to No. 1. "When it comes down to showcasing in a hard-fact [return on investment] report, it seems like [CompareNet] is offering some serious value," said Drew Ianni, analyst at Jupiter Communications.
'NET DEPARTMENT STORE
While CompareNet compiles
offline and online product and service data in 80 different categories, Brands for Less (www.brandsforless.
com), South Norwalk, Conn., which announces its launch today, is modeling itself as an Internet department store. It has chosen exclusive marketers for each category, with barnesandnoble.com for books, Staples for office products and FragranceNet for fragrances.
"Consumers are finding it difficult to find value online," said George P. Russell, president-CEO of Brands for Less, explaining that its in-house research shows that people new to the Net want a simplified, central place to shop.
Brands for Less shoppers are rewarded with incentives and cross-promotions. By first quarter 1999, Mr. Russell said the site would offer promotions at the point of purchase. For instance, if a consumer bought a printer in the high-tech area, Staples might flash a paper promotion. Brands for Less will also have personal shopper software.
Most of Brands for Less' business model, however, is based on e-commerce performance, in which online merchants pay the online department store a percentage of every transaction it sends them.
To promote itself, Brands for Less is launching a $15 million, year marketing campaign Oct. 1 and has signed deals with four unspecified portals. North Castle Partners, Stamford, Conn., is its offline agency and Modem Media Poppe Tyson, Westport, Conn. is handling its online advertising.
While the online department store has generated more than 3,000 unique visits a day in the last eight months, it's still unclear whether its strategy will pay off.
"Everybody's trying to figure out what model we should use to replace the online shopping model," said James McQuivey, analyst in online retail strategies at Forrester Research.
ENTERING BRAND GAME DANGEROUS
Their angle is to "throw a bunch of top-line retailers onto one Web site so consumers will enjoy the convenience and trust of those brand names." But that "puts [Brands for Less] into a brand game. They have to put their brand on par with the brands they're affiliated with." Mr. McQuivey said Brands for Less has to launch extensive offline and online marketing campaigns to get its name out to consumers. Over time, he said retailers may prefer repeat shoppers come directly to their site.