• by Ken Liebeskind , February 22, 2001

To launch its newest website, Nabisco, the Parsippany, NJ packaged foods giant, turned to email newsletter advertising.

In early February, the company placed advertising in one million newsletters to introduce Nabiscogifts.com, a website that sells gift baskets filled with Oreos, Life Savers and other Nabisco products. It is the only Nabisco commerce site, according to Wayne Shurts, Nabisco's VP of e-business.

The company placed the ads through Penn Media, a Chicago company that publishes its own newsletters and operates a network of 912 newsletters that reach 50 million subscribers, according to Roy Weiss, Penn Media's executive vice president of sales and marketing. Most of the newsletters are products of small independent publishers, such as three gardening hobbyists who started a gardening newsletter, he says.

For the Nabisco promotion, only five to ten newsletters were selected, though their subscribers totaled one million. The ads appeared in the first or second position of each newsletter, Shurts says. The idea was draw readers to Nabiscogifts.com for the first time and later sell them Valentine's Day gift baskets.

The initial ads didn't sell gifts. Instead, they offered free gift basket prizes readers could win by logging on to Nabiscogifts.com and filling out a form. Shurts says 19,000 of the readers who clicked through opted in to Nabisco's promotional email list. They received a second email, which actually sold gift baskets. Six percent of the recipients of the second email clicked through and 9% of those bought gift baskets, he says.

The numbers aren't huge but they represent a stable audience, he says. "The 19,000 are lifetime customers we can continue to market to."

The ad, with minimal copy that fit into the editorial content of the newsletters, was created by Digital River, the Eden Prairie, MN firm that hosts Nabiscogifts.com. The site receives 50,000 visitors per month, Shurts says.

Shurts says the email newsletter was among the first promotions Nabisco used for Nabiscogifts.com. It hasn't used traditional advertising at all. "TV and other forms are a bad spend because you get a mass media draw when you're going after online buyers. The newsletter hits people who already shop on the Web so it's a more effective spend," he says.

The Nabisco promotion is representative of recent advertising efforts by major companies who are either advertising in email newsletters or creating their own newsletters. While Nabisco advertised in other newsletters, Sam's Club, the giant retailer, sent out its own newsletter to 300,000 shoppers to promote holiday shopping on its Web site (www.Samsclub.com). It reported high site traffic and sales.

Email newsletter advertising is growing because the number of newsletters has grown, with newsletters on all kinds of subjects, from consumer guides to kids games to humor and entertainment. "We started in early 1999 with a million subscribers and by the end of the year we had 10 million," Penn Media's Weiss says. "We hit 50 million two weeks ago. It exploded." The typical newsletter has 50,000 subscribers but some have more than a million.

The newsletters are successful at generating high click through and conversion rates. A study by the Meta Group says click through rates of 15% and conversion rates of 5% are common, making them one of the most cost effective marketing tools.

Mainstream marketers, such as Dell Computers, Doubleday Book Clubs and Office Depot are the biggest email newsletter advertisers. They use them to create brand awareness and direct response efforts that generate specific action.

- Ken Liebeskind may be reached at kenrunz@aol.com