IQDirect bundles services as online promotions surge

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A comprehensive Internet direct-marketing and promotions program requires a lot of chasing around, assembling services from loyalty programs, Web coupon companies and online prize sites, to name a few.

IQ Commerce Corp., Saratoga, Calif., wants to package all those services in one offering, something it attempts to do today when it officially launches IQDirect. The service has been in beta test since August.

"I think a lot of people are confused by this space right now," said Sheridan Forbes, VP-marketing and corporate communications at IQ, of the abundant online direct-marketing choices.

By 2003, online promotions will make up 50% to 70% of brand marketing budgets, according to Forrester Research.

Mr. Forbes said the company is trying to not only tap into this growing market, but also relieve some of the pressure facing online marketing managers. Those executives must shop around to several vendors for services while facing increasing pressure to track return on investments for each promotion.


IQDirect is a software system that works with existing services such as online direct-mail services--for example, Intellipost Corp.'s BonusMail; or loyalty program providers, such as Netcentives' ClickRewards Incentive Network; or supplies its own technology, such as in the area of online couponing. IQ can track and manage Internet coupons, sweepstakes, sampling, rebates and direct e-mail services.

Netscape Communications Corp. used IQDirect to drive more traffic to its Netcenter portal in a holiday promotion. IQ is also working with FreeSampleClub, a division of the Sunflower Group. That company runs sampling promotions for businesses ranging from America Online to Frito-Lay and Pillsbury Co. IQ is taking over the FreeSample site April 15, a site in which users are invited to fill out psychographic questionnaires in exchange for free samples. In tests, more than 100,000 people have responded to the survey questions so far.

"Our alignment with IQ Commerce allows us to use their tool sets and scalability to handle millions of people," said Mark Siebert, president of Sunflower Interactive, noting that it's signed a long-term strategic relationship with IQ to supply the site's technology.

IQ generates revenue by taking a percentage of the transaction or a percentage of ad revenue off a client's site. Mr. Forbes added if it's a very small site or a new one without a large ad revenue base, IQ charges a monthly fee for its services that runs as low as $1,000.

IQ's technology allows marketers to modify elements of a campaign on the fly and see what components of a marketing campaign are working better than others.


IQ stresses that it works with many companies in the online incentive space. But it also competes with a few of the online couponing companies--including CoolSavings, Emaginet, Hot Coupons and Webstakes. IQ's couponing technology allows companies to sprinkle icons with special offers at point of purchase places around the Web; the icons can be found at spots ranging from search results to shopping agent results and embedded e-mail offerings. Clicked upon, the icons open up to a pop-up window with a relevant discount or offer, newsletters and is also investigating banner ads, trade print and direct mail. Spending was not disclosed.

Melissa Bane, analyst at the Yankee Group, said IQDirect definitely fulfills a need. ``Marketing managers don't have time to track down numbers for various types of campaigns,'' Ms. Bane said. ``If you can put [those numbers] into a centralized place, it simplifies their job.''

``Whether or not IQ works remains to be seen,'' she said. To succeed, it must be able to get the word out about its product, she said, adding that it must also convince the loyalty and online direct marketers with whom it wants to partner that it's not going to infringe on their territory.

Copyright February 1999, Crain Communications Inc.

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