An initial $200,000 online campaign launches in July; spending is expected to ramp up to $500,000 by October, said FreeRide President Jordan Stanley. The company is designing its own creative executions.
The campaign, consisting mainly of banner ads, also will include off-line efforts such as an infomercial for cable.
"We're ready to turn up the dials," said Mr. Stanley. "Our business model is enrollment times participation times price per point times points earned. The key part is participation and points earned and we can control those two already."
IS BUSINESS MODEL VIABLE?
FreeRide, which New York-based Mezzina/Brown spun off in December 1996, gives its 200,000 users the chance to gain points by buying or reviewing products and services both online and off-line. Users can redeem the points, worth about 2 cents each, for merchandise.
Jupiter Communications Analyst Evan Neufeld said the challenge for affinity program companies such as FreeRide, Netcentives, CyberGold, BonusMail and Yoyodyne is reaching critical mass. He estimates that to be more than 1 million quality, regular users.
"I still think the case hasn't been made that there is a business model for these guys," he said.
"Don't get me wrong, the guys in this are all really smart; there's a lot of brain power pressing on this. Ultimately, though, I don't know how much the role of middlemen like that will be valued."
SPREADING THE WORD
In the past year, FreeRide has built its partners to more than 1,000 from 22. Some include Home Box Office, Oreo cookies, Eastman Kodak Co. and Alamo Rent A Car.
When members buy products off-line, points can be redeemed by sending in the proof-of-purchase using postage-paid envelopes from a kit FreeRide sends new users.
FreeRide also is cutting deals with distribution partners in a wide range of target audiences to spread the word of its service across the Web. Some of those deals are with NetGrocer, Erols Internet, Playboy and CMPnet. Several others are pending, Mr. Stanley said.