Co-ops.com
Despite its unprecedented growth year to year, e-commerce accounts for only 2% of retail sales. Marketers are looking for ways to drive consumers to their Web sites to foster that growth.
There’s branding and integrated marketing, of course. Expensive, even when worth it.
But in an irony only a DMer can appreciate, e-tailers have taken to using alternative media to promote their Web sites. Many alt media firms are creating special card packs to cater to this need.
The result is a blind date with 20/20 vision: new alt media, meet the old alt media. One firm that has noticed the synergy is The SpeciaLists, a traditional list management/brokerage company.
e-Possibilities
“We’ve seen the opportunities in the e-commerce and dot-com industries, and, given our direct mail background, have seen that the dot-coms should be using traditional direct mail to drive traffic to their Web sites,” says Mario Lupia, a sales manager for The SpeciaList’s alternative media division.
As a result, the Weehawken, NJ-based firm has created directories “in six different markets to help e-commerce companies,” Lupia says. “Most directories are mass-marketed, are mainstream, and have general merchandise. We vertically target the offers and the sites.”
One example is e-sites Young Families Web Directory about to be launched by The SpeciaLists. Scheduled to come out three times a year and for delivery to some 1,500,000 families, the directory is a small booklet presenting up to 22 Web sites of interest to young families. It will be mailed starting this month with the Sesame Street Young Families and Madison/Young Families co-ops.
Why those particular programs?
“We chose those because of their track record of being highly responsive,” Lupia says. Sesame Street is over a year old. It reaches 500,000 active, paid subscribers to Sesame Street magazine. Advertisers repeat.”
The target households have a median age of 33, a median income of $42,000 or more, and an average of 2.5 children. Over four out of five own a personal computer and of those, more than 90% have Internet access.
Each company that participates in the program gets a 25-word description of the site, a four-color screen shot showing what the site looks like, and the URL.
In addition, each company gets a spot on esites4U.com, a Web site developed by The SpeciaLists. Described as a value-added service, consumers who get the directory also get a paper ad directing them to go to the Web site to enter a sweepstakes (the first is a family trip for four to Boscobel Beach in Jamaica). When the prospect logs on and clicks through to the “Young Families” page, all the ads for that category appear.
“When the young families receive these co-op packages, they are going to open up the directory with the Web sites that target parents and young families,” says Judd Bergenfeld, president of The SpeciaLists’ alternative media division. “And that parent is going to open it up and say, `wow, there’s Right Start and Software of the Month,’ and it’s going to drive traffic to the Web sites directing products to young families.
Most of the other directories out there are just marketed to the general consumer,” Bergenfeld says, stressing that instead of being horizontally targeted, The SpeciaLists’ program is vertically targeted.
The next program, Health and Fitness, is scheduled to launch in April. Each subsequent program will launch every two or three months after that. To handle the expected success of the programs, The SpeciaLists has established e-SpeciaLists.
Offline to Online
“The purpose of the program is to give advertisers a presence on and off the Web,” Lupia says. “And it’s covering all our angles.”
Advertisers have responded. “In the first effort, it sold out 100% of the space. That first effort has about 20 advertisers. One or two took multiple spots,” he claims.
“Although at one time banner ads were the main source of advertising for those sites, an individual has to go online and haphazardly find the site,” notes Lupia. “With these programs, we’re bringing the advertisements directly to the consumer and saying come to our site.”
He adds, “The bricks-and-mortar advertisers have used direct mail successfully for so many years. Dot-coms and e-commerce firms are starting to see the advantage of using those channels to get people to come to their sites. In the last few months, this traditional concept has become a new marketing strategy for Web-based companies.”
More important, perhaps, says Lupia, is this: “When you compare it to television or radio or billboard advertising, direct mail is very cost-effective.
“In the last six to 12 months, they’ve only started using targeted direct mail to reach their targeted audiences. They took a real hard look at their marketing efforts and realized that direct marketing should be used,” he says. “In our program, all the advertisers are paid spots.”
The potential in this sort of program has led some alternative media companies to re-invent themselves to exploit the nexus.
For example, Cox Target Media is best known for the nationwide Val-Pak and Carol Wright programs that offer consumers discount coupons to local and national retailers; Val-Pak alone drops 55 million pieces every six weeks. But the print-co-op is also accompanied by a Web site (www.valpak.com).
Out in Front
“Val-Pak coupons online puts a one-two punch in our advertiser’s messages in front of the consumers,” says Michael Martino, Cox’s director of Internet business development, noting the ad in the envelope leads to the coupon online.
The envelope also has the Val-Pak URL, as does each and every coupon inside. (Some coupons, of course, have their own URLs.) The consumers print out the coupons they want when they want through the Val-Pak site and other sites such as Yahoo!
The results , says Martino, are “encouraging.” Interestingly, the types of products or services that are the strongest online – such as dry cleaning and steak restaurants – are strongest offline as well.
When the program began in October 1998, the demographics of people online, as he describes them, were a little more upper income and computer savvy. The response skewed toward high tech categories.
Over only the past year and a half, Martino says, has the response been moving more into the mainstream.
“The number of people who had online access years ago were male and higher income,” he says. “It’s now come down to a generic nationwide demographic. That’s helping us.”
Martin stresses that Cox is sticking to its core competency – direct mail – as opposed to companies such has Priceline.com, which focus primarily on e-commerce.
While Val-Pak does segment geographically and caters mainly to small and medium sized businesses, Carol Wright is more targeted. Neither is as narrowly focused as the Young Families card pack. “Our business base is so large,” Martino says, “we can cater to a local market whatever it may be.”
However he does say the company will use BrightStreet’s tracking and consumer analysis technology to pursue what he calls “a different kind of online targeting” to offer specific types of promotions to specific types of households. Cox’s parent company, Cox Enterprises Inc., Atlanta, became the primary investor in BrightStreet early in February following a management buyout. The company plans to to selling BrightStreet’s technology through its Internet Promotions Group.
Another co-op mailer in the process of reinventing itself is WinMark Concepts Inc., Washington, DC, which is relaunching its Direct Male card pack in May with an accompanying Web site (the URL was not yet confirmed at press time).
According to Andrew Isen, the relaunch of Direct Male – which targets the gay male market – is the result of a couple of things he observed.
The first is the “disproportionate” number of gay men who not only have computers, but also have Internet access as compared to the mainstream population. He suggests the scale might be greater than three to one.”It says a tremendous amount about the number of gay consumers online,” Isen says, adding that he is confident approximately 90% to 95% of his list has Internet access.
The other thing that caught Isen’s attention happened last fall. He took a gay specific vacation and found out that 14 of the 16 men on the trip found and booked the vacation over the Internet.
The relaunch of the card pack is tentatively titled Direct Male 2000. The Web site will provide what Isen hopes will be a “one-stop shop” for visitors interested in the categories featured in Direct Male, such as travel and magazine subscriptions.
“Consumers won’t have to go through every card,” he says. “They can pick and choose the companies they want to go directly to.”
The Web site will allow consumers to link to the advertiser’s Web sites. “Our advertisers will know where the traffic comes from,” Isen explains.
He also believes that a combined alternative media/Web site program will do more than increase response. “The quality of the response will be exponentially better” because the Internet can speed response and conversion rates, says Isen.
“The card pack has been the most cost-effective sales vehicle available to small and medium-sized companies,” he adds. “Our approach is not to reinvent the wheel, just to make it spin faster.”
Isen also notes that “traditional direct mail is not as effective as it once was.”
More Options
Nevertheless, “the Internet won’t replace direct mail, but it will complement traditional direct efforts. The consumer will now have the option of responding directly or exploring the product or service further online.”
He plans to drive traffic to his Web site through space ads in gay publications as well as with the Direct Male card pack.
While Isen envisions gay males flocking to his site to buy, he doesn’t see adding content to the site to make it more attractive.
However, affiliate links and relationships to major gay content sites will be considered.
“It’s totally not a content site,” he says. “We’re doing what we do best: advertise and market goods and services to the gay male consumer.”
For alt media programs both niche specific and mainstream, the future looks on target.
“The hunger for online information is growing at a voracious pace,” Isen says. “These programs are going to attract a whole new bevy of e-commerce businesses. It’s changing at a lightning pace.”
