CoolSavings Enters Ethnic Markets

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CoolSavings Inc., an online service that serves coupons, offers, samples and free trials from advertisers to 26 million registered members, becomes the latest of many direct marketing firms to try ethnic marketing.

The Chicago company introduced separate marketing programs for U.S. Hispanics, Asian-Americans and African-American consumers interested in offers and product information directed at those audiences.

"Our clients are having an emerging interest in reaching these consumers and creating a competitive advantage," said Ken Treske, chief marketing officer at CoolSavings.

Starting in April, consumers on the CoolSavings database have been asked to identify their interest in receiving coupons, samples, free trials, e-mails and offers targeted at minorities. So far, about 40,000 have identified themselves as Asian-Americans, nearly 60,000 as Hispanics and roughly 80,000 as African-Americans.

What works in favor of Hispanics is a growing population and a resultant spending power. According to the Association of Hispanic Advertising Agencies, Hispanic households buy more than twice the average household in categories like children's over-the-counter medications and diapers.

CoolSavings' Hispanic marketing program has drawn the attention of companies in health and beauty care as well as publishers for subscriptions. Though it will not name the clients, CoolSavings claims the companies are testing coupons, banners and free trials.

CoolSavings said the ethnic program resulted from requests from its advertisers.

"The problem is, they've run out of good vehicles to use ... we give them a new, differentiated way of reaching incremental households, and because it's the Internet, you can imagine the speed versus direct mail and magazines," Treske said.

An ability to drill to the household level for each consumer helps. This includes gender and geo-demographics.

For example, a manufacturer can target Hispanic consumers in CoolSavings' database located near retailers that carry its product. Advertisers of products with general appeal also can segment CoolSavings' Hispanic database. Offers can be tailored with different creative for Hispanics versus the general market.

The offers, free trials, samples and coupons will be served online and via e-mail. Depending on the nature of the deal, CoolSavings will charge a premium for such targeted marketing.

"We're learning a lot about the distinct value these segments bring to a media property and the distinct habits that they demonstrate on our Web site and service," Treske said.

CoolSavings is confident that roughly 500,000 Hispanic households will sign up for this program. The company claims this market is hard to identify in most media, albeit receptive to targeted advertising.

Treske said other firms typically use ZIP code targeting, surname recognition and geography to identify the ethnic groups, including Hispanics. But that may not always work.

"All of those are fraught with inaccuracies," Treske said. "We asked them [CoolSavings members] if they were interested in receiving Hispanic-related offers and other ethnic-related offers. We do believe in the long term it'll refine our own marketing efforts and ability to retain and appeal to those market groups."

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