Start-up Delivers Web Surfers to Advertisers’ Front Door

Forget banner ads, text links and click-throughs. A new start-up Internet firm, eTour.com, promises advertisers it will deliver people directly to their home pages.

So far, the company has rounded up more than two-million users and is signing up 20,000 more every day, for a service that Media Metrix ranked number one in usage days per visitor last year.

The idea is fairly simple. Remember the days of surfing the Web? Well, if you’ve been on-line for less than three years, you’re not likely to remember these voyages of discovery. You’d start at a familiar Web page — maybe a friend’s personal site — and follow the links, discovering everything from daily diaries to lists of favorite sites.

eTour’s mission is to re-create those “good old days” in an era where more Web sites are created each day than were in existence during the early years. Users fill out a questionnaire about their interests and press a button, and eTour delivers them to a site that matches their preferences. They surf that site at their leisure, then press a button and move on to the next selected site when they’re ready. Users are rewarded with “points,” which they can exchange for gift certificates when they return to the site.

Founder, president and chief executive officer Roger Barnette compares the Web today with his satellite television service. When he only had the traditional television service, Barnette said he surfed around between the stations. After obtaining a satellite dish and having nearly 100 channels to choose from, he visited fewer channels than before, despite the increased opportunities. It’s simply overwhelming, said Barnette. Which is how he came up with idea for eTour.

The value proposition for advertisers — especially for content publishers — is an interesting one. Qualified customers are not simply delivered an ad. They’re actually delivered to the front door of the site. So far, the company has convinced firms like ESPN, Amazon.com, Disney, Intel, eBay, Jcrew, CDNow, Go Network, and CBS MarketWatch to advertise.

eTour’s rate card is constructed by cost-per-visit (CPV). The company says it charges $1.00 per visit, with volume discounts. It’s a significant premium over the $0.60 per click for a category buy or $0.40 per click for a network buy that Flycast Communications charges for its cost-per-click network. ValueClick charges $0.65 for a category purchase and $0.55 for a run of network buy.

The nascent firm has managed to line up some potent allies. In April, it inked a deal to work with Microsoft’s WebTV Networks Inc., to allow the more than one million WebTV users to employ the eTour system. The agreement calls for eTour to be integrated throughout the WebTV Internet service, as well as the WebTV Plus Interactive service, during the second half of the year.

It’s not doing too badly with the financiers, either. The company raised $10 million in its first round in October 1999, with investors including Monarch Capital Partners, NeoCarta Ventures and prominent angels like Jeff Arnold of WebMD, Bert Ellis of iXL and Jeff Levy of Media Metrix. The company’s second round financiers include Jefferson Pilot, NeoCarta and Susquehanna Radio. In this most recent round, the company raised $25 million.

So far, it appears that there are no on-line services similar to what eTour is offers, but it’s likely that some are bubbling just below the surface of the industry. One New York-based firm, RedFilter, seems to be following a similar model, but aiming at a hip 17- to 29-year-old demographic.

Whether it’ll work in the long run remains to be seen, but this new advertising model appears to be gaining some traction. It’ll be interesting to watch how eTour develops and whether the model turns out to be the big winner that investors, and advertisers, are hoping for.

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