• AdAge , Monday, March 13, 2006 10:30 AM

Online incentive marketing has emerged as a legitimate and lucrative marketing channel, with FreeiPods.com as its poster child. Incentive marketers work with customer-acquisition agencies and direct marketers in a pay-for-performance model that grossed more than $20 million last year for Gratis Internet, parent to the popular iPod giveaway site. How do you get a free iPod? Well, you purchase a vacation, a car, credit cards, bank accounts, magazine subscriptions, etc. It's a brilliant idea, really: marketers tack on a free iPod in exchange for receiving new customers. It's a marketing expense and a sexy added incentive for consumers to buy stuff. And it's not a scam: AOL, Blockbuster, Citibank, BMG Music, Stamps.com and Netflix are among Gratis' clients. However, the road to the free iPod is not always easy; in fact, it's often time-consuming. The process often includes lots of little steps, but the legitimate incentive marketers like Gratis do pay out those iPods once all the steps are completed. Social networking is often involved, and many young people are honest when they try to complete referrals, asking friends and associates, "please help me get an iPod." Incentive marketing is, of course, part and parcel to the online customer acquisition business, which is the fastest growing segment of Internet marketing, according to the IAB. The Direct Marketing Association says that by 2009, more than 1.1 billion in direct-marketing-driven sales will have come through lead generation.

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