Dash Unveils Targeted Advertising Tool
The DashBar application, which is in beta testing right now, allows advertisers to run an announcement at the bottom of a shopper's screen offering, for example, a cheaper price than what they are about to spend at an e-commerce site.
"We watch every page you go to," said CEO Daniel Kaufman. "We monitor most major commerce sites - and there are hundreds of them. We monitor all but the teeny weeny commerce sites ... anyone who they consider to be a competitor."
The browser plug-in is downloadable from the Internet and integrates with a consumer's Web browser, collecting discounts, rebates and promotions, which are stored in secure cash accounts. It typically offers consumers a 25 percent discount on purchases from the various sites it has agreements with.
When the shopper visits a member merchant's home page, he is identified as a Dash customer. The merchant is notified, and if the shopper makes a purchase, the merchant sends the rebate to a special Dash account where the customer can view his records. Dash gives the customer a check with his refunds on a regular basis.
"We are essentially auctioning you, the customer, off to the highest bidder and giving you most of the discount," Kaufman said.
Run by four hi-tech and marketing entrepreneurs, the firm makes its money by taking an undisclosed cut of sales from the merchants for driving traffic to their sites. The percentage varies by merchant. The company also sells lists of Dash customers who have spent $100 or more at a competitor's site and provides data about these customers.
There are currently more than 100 merchants working with Dash, including Barnes and Noble, Dell, iBaby, Omaha Steaks, Value America, furniture.com and Avon.
When questioned about the need to pitch competitor's customers, one merchant said it was a much cheaper way to attract business.
"We want customers who are used to buying online because we know from watching them that novices aren't going to give you that repeat buying history," said Jennifer Johnson, director of business development at online superstore Value America, Charlottesville, VA. "They're going to buy from you once and go around testing out a few sites. Experienced buyers know what they want."
A $1 incentive is being offered to affiliates who plug the software on their site when a user downloads it.
In addition, with help from a recent $12.1 million funding injection, the firm is aiming to attract 1 million shoppers by the end of the year with an integrated ad campaign that includes offline and online components.
However, because the application must be downloaded from the Internet - it takes about one minute to download with a 28.8K modem - it will likely deter shoppers from using it, according to at least one analyst.
"It's also going to be a hard thing for retailers to deal with this super commoditization. Retailers have to be more aware of the benefits of repeat purchasing. The difference between Barnesandnoble and Amazon is how convenient it is to shop, and how quick the process is of getting through the shopping cart," said Dave Copperstein, an analyst at Forrester Research, Cambridge, MA.
The service is only available for the Internet Explorer browser, but the firm is working on Netscape-compliant and AOL-compliant versions expected to be ready late fall.