DATABASE MARKETING

`Netting Consumers Don't have a strong database of prospects? An online promotion can virtually solve the problem.

Whether or not the Internet ever lives up to its hype as a sales channel, its unprecedented prowess as a data collector already cannot be denied.

The medium has proven so successful at gathering information on potential customers in an efficient, cost-effective, and relatively non-intrusive fashion, that data capture has already become a standard component of almost every online promotional campaign. Marketers can pinpoint not only detailed demographics of potential customers, but also anticipate their buying habits - thereby laying the groundwork for future targeted campaigns.

"[Building a database] exists as a primary function for almost everything we do," says Bill Carmody, chief marketing officer at newly formed agency Seismicom, San Francisco. "It's the smart move to use the campaign not just to close the sale, but as a regeneration tool."

"That's the typical evolution," adds Steve Caputo, a partner at Promotions.com, New York City. "Clients want to know about acquiring names [first], then transferring them to sales."

Loosening Lips The trick, of course, is to make the offer enticing enough to make consumers willing to divulge personal information. The give-and-take concepts of sweepstakes, product giveaways, and content dissemination have all proved effective, provided that marketers don't scare off people by asking for too much, too soon.

"For almost all online promotions, we ask [respondents] to give their e-mail. Then we can ask a more specific question about the sponsor," says Caputo. "A registration form is too intimidating to hit them with right away. If they hit `continue,' then we ask them to register. We can also deepen the profile each time they come back."

Online promotions can hit critical mass very quickly. "A typical promotion will draw 20,000 to 50,000 entries in four weeks. But if you have heavy advertising on radio or television, you can triple that," says Carmody. "We've had some efforts draw 500,000 entries in a month. If you consider that the cost is usually $10,000 to $15,000, that's a lot of value."

In a Shop, Click & Win effort for San Francisco-based Visa that ran this spring, Seismicom developed a scratch-off game consumers could play when shopping at any of seven partnering online merchants, including Beyond.com, CDNow, Bed Bath & Beyond, and Martha Stewart. After completing their transaction, shoppers could enter the game from a link on the "Thank You" page, whereupon they registered to receive a gamepiece. To do so, they were required to submit both their e-mail and home addresses.

More than 50,000 consumers signed on, a 10-percent response rate. In addition, participants received a second chance to play if they forwarded the game to a friend. "We were very pleased with the viral marketing component. That's something we plan to increase in future efforts," says Gerry Sweeney, vp-marketing at eVisa, San Francisco.

The campaign also gave Visa feedback it normally isn't privy to. "Up until now, member banks held the information on the consumers. Visa didn't really know anything about the cardholders themselves," says Carmody. "This enabled them to collect some personal information."

Focused Eyeballs The Internet can produce impressive response numbers. But while the number of impressions may be the primary yardstick in other media, the Internet's biggest benefit may be in attracting qualified audiences that add more value to a database than just names.

"We did work for an automotive client that didn't draw the numbers of some other efforts," says Caputo. "But 73 percent of visitors opted in [for more information], and when asked if they'd be in the market for an SUV over the next year, 63 percent said yes." While the client's database wasn't exactly bursting at the seams, a small, interested audience beats a large, predominantly apathetic one every time.

NeoPlanet, Tempe, AZ, is a software company that offers an enhanced browser with a built-in instant-messaging service. In order to gain permission from potential customers to begin targeted marketing pitches, the company ran a summer sweepstakes developed by Seismicom that gave away a trip to Aruba. Visitors to the NeoPlanet site who downloaded software were asked to provide information concerning their demographics and interests.

"We got data that was actionable," says NeoPlanet marketing manager Bob Olson. "We were able to ask what age groups people were in and build a profile on what interested them." The campaign exceeded expectations, according to senior vp-marketing Robert Dunoff, and the company is about to launch a new campaign offering visitors the option of registering to win a trip to Cancun or a new computer.

Data-gathering promotions can provide marketers with useful information about consumer perceptions as well. One major newspaper publisher designed an e-mail program with BigFoot Interactive, New York City, to test both a hard-sell and soft-sell approach for its online efforts. The company sent an e-mail to prospects offering a chance to win a PalmPilot, and encouraged participants to forward the offer to friends. The e-mail also asked a handful of questions about reader preferences.

"Readers said technology was what they most wanted to read about, and that came as a big surprise," says Kate Leahy, BigFoot's director of marketing. "As a result, our client started including more [content] focused on technology."

Keep Them Coming Back One potential drawback to using promotional offers for data capture is the possibility of obtaining names interested in the offer alone. Most marketers are hoping to use the Internet to build continuous dialogue with customers.

Blockbuster, Inc. has adopted new technology to do just that. Using a service offered by ValueFlash.com, New York City, the retailer is mailing card-carrying Blockbuster members CD-ROMs containing software with full-motion video and digital audio capabilities, Internet hyperlinks, and an electronic-messaging application that links them directly with the chain. Recipients load the software onto computers, then send Blockbuster their e-mail addresses and entertainment preferences.

"This is when our dialogue begins with them," says Greg Smogard, president of Blockbuster Marketing Solutions, Dallas. "Based on their responses, we send messages about multimedia entertainment experiences that might include video clips from feature films, game demos, special offers, and e-mail links."

Of course, it doesn't hurt to have customers who are just as interested in you as you are in them. "We have a loyal, rabid fan base," says Victor Pupo, marketing manager at the World Wrestling Federation, Stamford, CT, which has been a pioneer in Internet marketing. "They don't feel like they're being hammered with marketing [because] they want to know what's coming up."

One of WWF's most successful online strategies is ThingWorld.com, a Web site at which fans can download content and merchandise such as screen savers. The site has signed up 600,000 members, each of whom filled out a registration form listing their interests, and most of whom are more than willing to hear the latest promotional offer. That's a marketing smackdown for sure.

Free information can sometimes be as great a lure as free product, and is often better at developing ongoing relationships. The WWF circulates three opt-in newsletters - Full Body Plus, Shopping Network, and the wrestler-specific The Rock - to a combined circulation of 1.5 million. It sends regular e-mails about upcoming pay-per-view events and other offers to all subscribers, and is now using the lists to drum up interest for its new XFL football league.

In the online world, successful promotions need not be overly hyped extravaganzas giving away a six-figure grand prize. In a campaign for NBC, New York City, Promotions.com designed a watch-and-win effort around the TV network's 21 game show that dangled a mere $500. Viewers received clues at the end of each commercial break during the show, along with a URL they could visit to enter the clues and register for the prize. The promotion tallied more than 500,000 entries. "It doesn't take a lot to motivate people, but if you've got an engaging story to tell and it's fun, they'll be interested," says Caputo.

They might even provide a little information, too.