| Drawing
on nearly 20 years of direct marketing experience, Worldata
last year entered the cyberspace frontier with the belief that
direct marketers were better prepared for the interactive nature
of the Internet than most other businesses.
As the World Wide Web began to unfold, Worldata CEO Roy
Schwedelson said he saw an opportunity to augment the numerous
direct marketing services his company provides, which include
list management and brokerage, databaase marketing, merge/purge,
modeling and profiling, and response analysis.
Boca Raton, FL-based Worldata's core client base consisted
of more than 400 leading software and hardware companies at
the vanguard of the Internet revolution, so it was only natural
for Worldata to carve out a niche for itself.
Schwedelson's answer was WebConnect, which was launched
a little more than a year ago. The Worldata unit places advertising
banners and links to other web sites for its clients, who
are web site owners. WebConnect is currently running more
than 2,200 different banners on behalf of 89 diverse clients
selling everything from automobiles and golf equipment, to
financial services and books.
DMNews: Being specialists
in the high-tech and microcomputer markets, many of your clients
were obviously looking at ways to take advantage of the Internet.
Did that figure in your plans to launch WebConnect?
Roy Schwedelson: There's
no doubt you learn from clients as well as the techniques
you use. We've been very fortunate that many of our clients
have been leading-edge technology companies.
DMNews: When you first
heard about the Internet, did yyou foresee its marketing implications?
R.S.: The web has become
the ultimate direct-response medium. For anyone who has toiled
in the direct marketing field as long as I have, this thing
is the ultimate challenge because it's flexible and it changes
every day. You can alalyze your return on investment, and
there are a multitude of ways to target wonderfully and present
your offer.
DMNews:
But doesn't the element of consumer control change the nature
of direct marketing on the Web?
R.S.: In traditional advertising,
marketers have told their stories to consumers. Because the
Internet is interactive, consumers are now telling marketers
what they want, rather than simply viewing what the marketers
want them to see.
DMNews:
How did you envision Worldata's role in this emerging medium?
R.S.: I have always viewed
the list management/list brokerage field as a direct-response
media service. Using that as a guide, [I viewed WebConnect]
as another direct-response media service we could provide.
The model - the business plan - is relatively the same. We
just added another avenue for direct marketing.
DMNews:
Which of your customers have shown interest in WebConnect?
R.S.: The first group of
WebConnect clients were not our traditional customers, although
today, we do have many traditional customers involved. Some
of the early clients that placed banners and links through
us
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were banks like First Union. [In mid-May], we signed an agreement
with Publishers Clearing House to handle its site. Our traditional
customers - are involved in WebConnect. Omaha Steaks, Collectibles
direct marketers, and magazine publishers like Consumer Reports,
are all experimenting with it.
DMNews:
How would you compare Web Marketing with traditional direct
marketing?
R.S.: People go on-line
to find something out. They'll jump from one site to another.
The trick here is targeting to help guide Web users to your
site. The banners and links are like the outer envelope of
a direct mail piece. You have to have a Web Site that is conducive
to to eliciting a response. It's what you do in a direct mail
campaign. You're testing your creative, copy, offer, package,
and lists. It's really the same thing. That's why the Web
is a natural for direct marketers.
DMNews:
A WebConnect feature that really takes advantage of the medium
allows advertisers to measure the results of their links and
banners on other web sites.
R.S.: That's correct. We
realized giving more measurability is important. Starting
June 1, advertisers can go into private URLs (uniform resource
locators, or Web addresses) for each banner, and at no extra
charge, look in real time at the impression rate (how many
visitors are coming to a site that they are advertising on)
as well as the click rate (the number of clicks on the banner
linking to their site).
If a banner is not doing well, the customer can change it
so it will draw a higher response. In other words, if you
have 2,000 people visiting your site and you're only getting
five clicks on your banner, something is wrong with the banner,
not the site.
DMNews:
Web measurement companies like NetCount charge advertisers
to allow them to monitor their click activity. You don't view
that as a revenue opportunity?
R.S.: At WebConnect, it's
included in the cost. That's something a lot of other companies
don't want to hear, but it's only fair. Quite frankly, it's
ridiculous not to give them that. When a mailer rents a list,
he knows right away what the response is. Why shouldn't somebody
who's advertising on the web?
DMNews:
What are the fees involved for WebConnect?
R.S.: The average cost to
place banners on a site is $350 for a minimum of three months.
There's also a $50 setup [charge] per site. So a buy of 10
sites, hypothetically, would cost about $3,500 a month. If
you stop and think about what space advertising and direct
mail costs, in certain regards it's very [comparable]. The
typical number of sites clients are taking ranges from 5 to
15, with 10 being the average.
DMNews:
How much revenue do you anticipate bringing in through advertising
links and banners this year?
R.S.: In gross revenues
this year, we'll probably see seven figures. Let's put it
like this: It's bringing in significant revenue. I don't think
Worldata is going to stop doing what it does in its traditional
role. I don't think I'm ready to retire on WebConnect at this
point. We're certainly investing in it because we see that
it's paying results. It has become more sophisticated. In
the past six months we've invested a great deal of money in
the technology and new software. We've just brought more T1
lines into the operation and increased the size of our servers.
Have we turned the corner? I think we see the light at the
end of the tunnel.
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