Click Through the Clutter
05/01/00- Profit Magazine
by K.K. CAMPBELL

The Internet's power is also its problem when it comes to online marketing. The upside: It's an affordable platform for global publishing; millions more go online; and it can bring you closer to your customers. The downside: The endless distractions and onerous competition. There are over one billion Web pages out there, according to a January 2000 study by Inktomi and NEW Research. Billions of dollars have been wasted trying to figure out how to be heard above the din.

But there's no hope in an offline marketing oldies that's found new life on the Web. Online contests are how companies such as Tridel (win a free condo!) and Sears Canada (win an oven!) are increasing their site traffic, building online brands and, most important, convincing visitors to divulge their e-mail addresses willingly. With a bit of creativity, even businesses with more modest website goals can target niche markets and build invaluable customer relationships with online contests.

According to New York-based Jupiter Communications, online contests are among the fasts-growing online activities. What's more, nearly half of all American Net users (49%) have entered an online contest.

Toronto-based developer Tridel Corp. recently finished a 12-week online contest promoting a downtown condominium complex. By offering a free condo, it actually convinced 30,000 people to complete an 81-question online survey that asked about lifestyles and incomes. The contest was aimed at "Generation Y" first-time home buyers - people with good salaries but no equity to put into a condo.

A $160,000 condo got people's attention, but weekly draws of prizes provided by contest partners such as Cantel AT&T (not Rogers AT&T), the National Post and Whirlpool kept people watching the site - and kept Tridel's name in their minds.

We were delighted with the response," says Jim Ritchie, senior VP of sales and marketing. "We've always listened to our customers through traditional response marketing, but the Internet lets us do it at incredible speeds. And with much greater accuracy."

The contest even helped Ritchie fine-tune the development he was selling. When survey results indicated most people wanted one-bedroom suites, Ritchie adjusted the layout to add more.

Online contest can also raise brand awareness and build brand value - if you do it right, says Chritos Doulis, director of business development at Toronto-based Net Results Internet Advertising Inc. (www.net-results.on.ca), Tridel's contest designer. "If someone's captive for 10 to 15 minutes filling out your questionnaire, include content that talks about your company, what your company is doing and its philosophy, because people read it and associate it with your brand," says Doulis. This way people will recall your brand and know what it represents.

But the real prize of online contests is the opportunity to garner e-mail addresses of potential customers. "Gathering e-mail addressed is the premier function of online contests," says Dwayne Dear, vice-president of business development for Montreal online ad agency BAM! Solutions (www.bam.net). Dear says success is measured by the number of email addressed collected.

Ritchie agrees. To begin, Tridel is using e-mail addresses collected during the contest to invite participants to seminars explaining the complex financials behind condo ownership - at a fraction of the cost of mail. Tridel believes it understands customer needs better because of the survey and it's staying closer to those prospects with programs that directly address their needs.

And unlike many other marketing vehicles, says BAM! President Chris Emergui, online contests provide measurable results. "You can calculate return on investment every time," he says. "The response rate is much higher than direct marketing's 2% you have the ability to refer friends [through e-mail] - it can grow quickly."

Still, online contests don't come cheap. BAM! Charges between $3,000 and $10,000 to design a contest and manage entries. (Net Results offers even higher-end services, with charges starting at $50,000.) Furthermore, the prizes that make contests attractive, such as cars, trips and houses, are usually expensive; the offline promotion required to get a contest rolling isn't cheap either.

Tridel promoted its contest through posters and billboards in the Toronto area - methods beyond the budgets of most smaller businesses. But Toronto's Evelyn Hannon, founder of Journeywoman.com proves that with a little creativity, low-cost online contests are possible.

Hannon's site - which targets independent women travelers with general information, inspiring stories and safety tips - has run contests offering prizes from $100 cash to inexpensive travel accessories. But her most recent contest offers a trip to Central America - thanks to a partnership with Temptress Adventure Cruises, which is donating the prize. Hannon says she was able to leverage Temptress's interest in her site's niche audience into a deal 0 a tactic she recommends for other entrepreneurs.

Hannon's contest goal isn't to draw new traffic, but rather to strengthen existing relationships. "It's giving something back to readers," she says. That's allowed her to eliminate offline marketing costs by promoting the contest via e-mail solely to the 20-000-plus subscribers to Journeywomen.com electronic newsletter. Of course, it took two years to build that readership; without such a resource you'll probably have to market offline.

Still, Hannon encourages companies to be inventive. If you apply some creative thought, you can always find ways to put a promotional deal together," Hannon says. "You just have to be entrepreneurial!"