• by Jolyan Herman , December 1, 2000

Sweepstakes and incentives are proving successful at building traffic and collecting consumer information. And they can be up and running in a matter of hours.

Now that online consumers have seen enough banner ads to make them sputter, and web surfers are overwrought with spam campaigns and e-junk mail, what is the future going to hold for advertisers who want their audiences to feel invited rather than repelled by the images flashing before them on the computer screen? How do they reach the over-stimulated masses? Simple. Entice them by offering something nice.

Let’s face it, people like to feel like they’re getting something for free. Research shows that providing online consumers with incentives, loyalty programs, or sweepstakes opportunities reaps great rewards. In fact, according to Jupiter Communications, 73 percent of online consumers will repeat purchases from a site when a promotion is offered. Likewise, 49 percent of consumers surveyed reported logging on to the Internet at least one time a month to enter a sweepstakes alone. So, not only can advertisers encourage more business by using an incentive-based strategy, but they can use online companies designed for these purposes to do so, making life a lot easier for the media planner.

One of the biggest advantages to advertising online is in the medium itself. Where else can you provide consumers information-rich content with instant database response? The media planner can now easily take advantage of the instantaneous information exchange that goes on when incentives and sweepstakes companies are engaged in the advertising process.

What’s Your Incentive?

What exactly are loyalty-based incentives? Some see them as the new currency of the web. Some say they’ll become the future of currency as we know it. Simply put, companies such as MyPoints, Flooz, and Beenz allow consumers to accrue virtual currency online, which they can redeem for actual goods and services. In an instant, the online shopper is linked with scores of merchant sites where they can spend their currency with ease. By offering online currencies as incentive, the advertiser is aligning him/herself with the giant brand names that encourage such exchange. Likewise, s/he is saving time and money by allowing the redemption network to handle administration issues. Reward-based programs are set up to organize, plan, and personalize the promotions—saving time and money for the computer-savvy advertiser who wants to get its merchant’s brand visible.

Incentive-based reward services are entities unto themselves—in other words, they are set up to virtually run without much maintenance, all the while collecting valuable consumer information as the hits pour in. If consumers register directly with a reward-based service such as MyPoints or CoolSavings, they are asked to provide valuable marketing information about themselves. However, according to Jupiter Communications, though 93 percent of commerce sites offer some kind of promotion in order to attract consumers, only one in four takes the time to analyze how many of those consumers are new to the site and how many are veterans. Why not take advantage of the data gold mines cropping up when such a service is used?

Beyond the present masses of consumers lie the future generations of online shoppers. With this in mind, by aligning oneself with online currencies, today’s media planner may be investing in the long run. Robert Levitan, CEO of Flooz.com, sees the online exchange of value as the veritable wave of the future. He foresees people exchanging value in the form of actual monetary currency, gift certificates, coupons, and even frequent flier miles with increased frequency. Flooz, a type of gift exchange currency that has no fluctuation in value, provides an instant link between the Flooz currency holder and the many merchants that honor the Flooz currency. “We’re [providing] a bridge from all kinds of electronic currencies to actual material goods from brand name resources,” he explains. Whereas “Beenz is a reward currency, [Flooz] is an online gift currency,” says Levitan. “You can earn Beenz and redeem them as Flooz.” Thus engendering a new way of doing business— by co-opting the competition and doing something mutually beneficial.

Furthermore, using Flooz for corporate rewards and gift-giving saves the corporation 20 percent of what they would pay in fees without the service, says Levitan. Meanwhile, recipients get to choose what it is that they really want and will consequently spend more time online. If the Flooz holder chooses, he or she may even donate to charities and further strengthen the network of web currencies by promoting giving to the offline community as well.

Sweepstakes and Rewarded Registration

Sweepstakes key into that little part inside of everybody that wants to be a winner. Where would Regis Philbin and Ed McMahon be today if our society wasn’t obsessed with winning? What better way to make a mark on consumers than by offering them that?

Whereas the infrastructure for setting up an offline sweepstakes campaign can be forbidding, the Internet offers an ideal setting for this type of venue. Sweepstakes service providers such as DoubleClick and EPrize make it simple for media planners to put their sweepstakes idea into action. With the I.T. crew and the legal team, planners can simply visit a sweepstakes building site, like DoubleClick, where the online “wizard” takes them through every step. The result is a sweepstakes program, complete with legally compliant rules, that can be tailored for the client’s needs within a matter of hours. This saves weeks of work and thousands of dollars—not to mention human resources.

EPrize also offers an efficient sweepstakes model that can be up and legally running within 24 hours’ time. They handle bonding and registration in states that require such measures, and insure that the rules are in compliance with the laws as well. EPrize boasts a cut-and-paste line of HTML code to place on the merchant’s existing site that will launch the entire sweepstakes without the online consumer having to leave “home.” As such, the merchant’s site remains intact under the window as the consumer registers for the promotion. Custom-designed sweepstakes are also available for the merchant with the penchant for a well-tailored promo as well.

Perhaps the most useful perk of launching a sweepstakes campaign comes in the form of the valuable data that pours in. According to surveys, 39 percent of consumers said that sweepstakes served as a key motivator for divulging personal information. Thus, not only is the data being delivered in bulk, but a company like DoubleClick enables the marketer to take a real-time look at who is giving out all of that personal information. As this occurs, the media planner can tailor the ongoing promotion according to who has submitted information in a timely and keenly targeted manner. Says Genevieve Mallgrave, Director of Promotions at DoubleClick Sweepstakes, “we believe in targeting, and we encourage quality, not quantity.” She further asserts that when a company engages in a sweepstakes, “the leads that you’re getting are quality—you can get the right people.”

Costs for these promotional services vary, but can range from “$4,000 to $400,000, depending on the client’s needs,” says Mallgrave. Because of automated technology, media planners can license as few or as many promotions as they desire for a fixed cost. It’s just a matter of plugging in the variables. The resulting data provides specifics such as gender, age, occupation, interests, and hours of time spent online. Other models that provide data-rich registration information include rewarded registration programs that offer prizes or discounts upon registration and rewarded surveys. “You wouldn’t believe the kind of response we got,” said Mallgrave of a rewarded registration promotion that DoubleClick ran for PlanetHollywood.com. “You would have thought we were giving away the Hope Diamond for all of the response had.” What were they giving away? T-shirts.

Since recent speculation about the sinking value of banner advertising has buyers and planners looking for better ways to lure in new customers, advertisers are actively looking to take advantage of the media with which they work. The tools and technology available online make it easier than ever to reach consumers. And, as broadband technology becomes more prevalent, the ability to create media-rich promotions will likewise increase.