Inside a New Programmatic Marketplace That Links Brands With E-Tailers
There's a programmatic marketplace for seemingly everything now, including your Toys 'R Us box. The latest in a decades-long series of efforts to replace newspapers and direct mail for distributing coupons and gift cards uses an online market to put them into e-commerce parcels.
Exact Connections is a new service rolling out of beta test that links offers from brands with online retailers that ship 9.6 million packages weekly. It comes from Exact Media, a four-year-old Toronto-based startup that for years has been shipping product samples from the likes of Procter & Gamble Co., Unilever or Johnson & Johnson through 120 online retailers such as Toys 'R Us, Gilt, Zulily, Kohl's and Saks Off Fifth.
The new dashboard-driven marketplace, at least for now, is limited to gift cards or paper inserts, not samples, which Exact Media continues to manage directly. Remote printing makes it easier to for buyers and sellers to do deals among themselves on cards and coupons, while the logistics of product samples are trickier.
The idea is to distribute offers through something everyone wants to open and no one ignores – their e-commerce shipments, said Exact Media CEO Ray Cao.
Compare that to the alternatives. The response rate for direct mail is 2.9% to 5.3%, depending on whether it's for new prospects or existing customers. That and the roughly 1% redemption rate for newspaper coupons may seem low. But they're great compared to click-through rates on e-mail (0.3%-0.6%), search ads (0.5%), social media (0.6%) and display ads (0.9%), according to a report last year from the Direct Marketing Association.
Chefs Plate, a Toronto-based home meal delivery service now covering most of Canada, has tried all those things to distribute offers, but most recently gave Exact Connections a shot with favorable results, said Connie Kuang, marketing director.
She noted all the mail in her own home that goes straight into the recycling bin, and she welcomed the idea of sending offers through e-commerce packages "that would make us welcome in people's homes."
The Connections dashboard made it easy to find online retailers she might not have otherwise considered, she said. She did a deal with Toys 'R Us to send introductory gift cards to parents of newborns and young children for a new Family Plan.
Exact Connections came in at only around a quarter of the brand's average cost-per-thousand across its full range of traditional and digital media, she said. "It's quite amazing for a physical piece," she said, "and rivals some of our digital channels. It's definitely cutting a lot of wasted distribution. It's definitely a winning channel we're going to continue to explore."
On the sell side, Chegg has a long history of accepting samples and offers from other markters into the textbook rentals it sends to college students, even before it started working with Exact Media on samples years ago, said Mitch Sprolan, exec VP-marketing services. But Connections makes it easier to do deals on paper or plastic offers that don't add much weight.
"It's simply a very slick platform," he said. "It takes the friction out." In the first two weeks of the beta test, Chegg processed one deal and got two more on its dashboard, he said, one of which will likely be a fit.
Even so, Chegg doesn't want to inundate students with offers they don't want. Fortunately, that's hard to do given college students' appetite for free and reduced-price stuff.
"We've done tests to see if there's a maximum we can put in the box," Spolan said. "We have not reached a threshold where students are saying uncle. They love it. They go on Instagram and Twitter and thank the brands."