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Viral Marketing With Incentives

  |  January 3, 2001   |  Comments

We all understand the value of an incentive program in driving sales or other conversions. And we know how well viral marketing works online. Want to make a campaign rock? Give your incentive-based marketing efforts a viral twist.

As a rule, traditional marketing concepts and vehicles do not translate well online. For example, many times a client will bring an interactive ad agency into the picture only after working with a traditional agency to develop a creative concept and theme. In such a case, transferring that concept and theme online as authentically as possible usually makes sense.

But this strategy poses some challenges. Because the web is a unique medium, certain offline concepts simply do not translate well there. In the online world, for instance, creative work that is more functional than sexy can pull in higher response and conversion rates than it would offline. Online, the ad that is less creative, more direct, and more strategically placed is often the one that yields the conversions on the back end.

Such a tactic, though, can be tough to sell to clients because they love to see their creative work and often value this more than the actual execution and placement strategy. It can also be hard on the agency because creative production is often reduced and, hence, so are production budgets.

Moving Online

There's one marketing vehicle developed in the offline world that works great online: viral, or "refer-a-friend," marketing. We all recognize the power of a referral, and naturally a referral is a lot more qualified when it comes from someone you know and respect. The best part of it is, of course, that it costs virtually nothing.

With ad budgets tightening up second by second over the past seven months, you have to recognize and take advantage of everything and anything you can to maximize your exposure at a low cost. A viral marketing push is, in essence, a freebie once it's set up.

Viral marketing is an old concept, even on the web. Nearly every major content publisher offers an "email this article to a friend" option, and many contests offer incentives to refer a friend.

Some of the best results we've had come from contests including a viral component at the start-up stage for a client company whose user base is only as big as the staff in the company's office.

The Size of the Prize

We all understand the value of an incentive program in driving sales or other types of conversions. What a lot of people do not know is that very often how impressive the prize is doesn't matter. Frequently, the smallest incentive works well, and the value of each registrant grows exponentially when you include a "refer five friends" option.

We've run and promoted contests for clients by giving away a variety of items as incentives. For example, Tripeze.com launched in May 2000 with a contest giving away two free airline tickets every day for over three months. The response and redemption rates were fantastic. The giveaway was a great way to generate interest in the company's services and was hugely successful.

Danier, a leather retailer, also ran an online incentive program with us around that time. But the incentive it offered was pretty modest -- a $500 voucher for its products. The contest generated a response rate similar to that of Tripeze.com's promotion. At the other extreme, I've seen contests giving away as much as $500 in cash every day that have completely flopped and created very little awareness.

The difference here is the viral component. The prizes were not even comparable in value, yet the ROI gained from the efforts was similar. When visitors were brought to the sign-up page for the Danier.com giveaway, they had the opportunity to have their names thrown into the hat up to five additional times for each friend they referred. A highly qualified referral is something that will always bear more weight than an ad thrown in your face amid a clutter of other ads competing for your attention.

Still, many contests today do not take advantage of this opportunity to leverage the value of the existing audience. Viral marketing costs very little time and effort to develop and is essentially free of charge once implemented. In terms of ROI, it can be the key component of your online contest and should be implemented to maximize reach and returns.

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Adam Posman

Adam Posman is a strategic planner with BAM Strategy, a leading digital agency with offices in Montreal and Toronto. BAM's core services include strategic planning, media buying, creative production, online contests, email marketing, and customized marketing technologies.

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