Webstakes introduces opt-in marketing service

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Online savings and prize club Webstakes today officially unveils iDialog, an opt-in marketing program that tries to give users more control over promotional e-mails.

To kick off the program, Webstakes is planning and creating a $5 million offline and online marketing campaign for 1999. It will begin an ad agency search next year. Webstakes also said in the next two to three months it will announce some acquisitions and portal relationships, as well as a round of financing.

The iDialog service tries to establish a relationship with users through a technology called DirecToMe. Every time registered Webstakes members visit the site, it recognizes them and asks them via a text message whether they'd like to receive a specific promotional

e-mail based on preferences.

"It's a model which takes traditional advertising and branding models and turns them upside down," said Steve Krein, president and co-founder of Webstakes, New York.


Mr. Krein says the problem with regular opt-in e-mail is that when users agree to have promotions sent to them, they don't realize they could be opening themselves up to a flood of e-mail messages, from which they must then opt out.


To motivate users to return to Webstakes, the site has a weekly newsletter with promotional updates, which goes to more than 600,000 members who've opted to receive it.

Webstakes also vows not to sell any of its e-mail lists. So far, Webstakes has signed up 1.2 million members and given away 4,000 prizes, which range in value from $200 to $400.

Partners using Webstakes' marketing program include CBS SportsLine, Computer Discount Warehouse, HomeArts, Netscape Communications Corp., PC Flowers, SonicNet and Universal Studios. Advertisers usually sign up for Webstakes in annual contracts, which cost $135,000 to $1 million, said Mr. Krein. Merchants also can choose to be a part of Webstakes' Affiliate program and hold loyalty programs on their own sites.

"It's a savvy way to brand opt-in e-mail marketing," said Marc Johnson, senior analyst at Jupiter Communications. "Online promotions definitely serve a dire need in the marketplace to drive interaction."

At the same time, he said, excessive promotions can potentially undermine a brand proposition, and discourage people from paying full price for a product.

Copyright November 1998, Crain Communications Inc.

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