$200,000 Web Experiment Nets 3Com Nearly $4 Million

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What began as an afterthought to an Internet advertising experiment has spawned a prospecting database that turned a $200,000 outlay into more than $3.9 million in sales for 3Com Corp.


The Santa Clara, CA, manufacturer of data-networking products began the campaign to bolster its brand among purchasers and end-users of network interface cards, or NICs. NICs are what enable computers to hook into networks of other computers. They generally sell for between $100 and $300 each. 3Com's aim was volume buyers.


"My primary goal was education and message reinforcement," said Caryl Kruse, manager of marketing programs group at 3Com, "but as the team started working on [the campaign], it became apparent that here was a huge opportunity to build a database."


3Com's NIC campaign, dubbed 3Com Classic, was an online sweepstakes featuring a chance to win a restored 1959 Corvette convertible.


"We communicated reliability by giving away a classic American sports car that has endured over the years," said Chris Peterson, president of the agency in charge of the campaign, Times Direct Marketing Inc. (TDMI), San Francisco.


The foundation of the campaign was a satellite Web site to which TDMI drove traffic using a combination of banner ads on about 20 Web sites and direct response e-mail. Peterson estimates that he bought 2.5 million impressions on 3Com's behalf. Sites in the campaign included technologically oriented properties like PC World (www.pcworld.com), CMPnet's LAN Times (www.lantimes.com) and ZDNet (www.zdnet.com).


3Com also promoted the sweepstakes heavily on its own site at www.3com.com and rented the e-mail subscriber lists of IDG Publishing's e-mail newsletters Network World, JavaWorld and SunWorld. In all, 22,372 people responded. Peterson said the cost per response from banners was $5.05 and the cost per response from e-mail was $3.90.


Key to the nine-week campaign was that TDMI monitored its own results and was able to buy media in increments as short as one and two weeks. Such short buys, Peterson said, "offer a much better chance at success than if you just do a bunch of media research, post some banners and let them fly because you can affect change in midcourse."


TDMI also carefully monitored lead quality and Web-site conversion rates to ensure media buying decisions weren't based purely on click-through volume.


"In 40 percent of the campaigns we're involved in, the winning banner has a lower click rate," Peterson said.


Kruse added that lead quality was doubly crucial because of the poor reputation similar programs have among sales reps in general.


"When we first said we were going to do a Web-based contest to generate leads, the sales force said, 'Pffffft, go ahead. We've tried it before. It will never work,' " Kruse said.


To ensure that reps would follow up on the leads, Kruse arranged for a $1,000 bonus for each regional sales rep who netted the most sales from the 3Com Classic database. Also, rather than dump the entire database onto sales, Kruse profiled the best prospects and pulled 482 'A' leads. Prospects chosen for follow up:


* Worked at companies of 100 or more employees.


* Indicated a need to buy 100 or more NICs within three months.


* Were responsible either for evaluating, recommending or making purchasing decisions.


The result: 93 sales for $3.9 million.


"We were pennies shy of $4 million with this contest," Kruse said. "[Sales] were blown away by the quality of the leads."


Besides being able to change the media plan on the fly, the beauty of the 3Com campaign also lies in how inexpensive online leads are to process, Peterson said. Where mail requires personnel to process responses, 3Com Classic sweepstakes entrants filled out their own information online, eliminating administrative costs.


"With a print campaign, suddenly, those 21,500 bad leads start to look expensive," Peterson said, "but with an online campaign, who cares? It's hard disk space."


TDMI currently is implementing a similar home-networking product campaign for 3Com.
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