Education Products Firm Learning the Ropes Online

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Games2Learn, Costa Mesa, CA, this week is expected thrust itself into cyberspace with a Web site that might serve as a blueprint for how traditional direct marketers can use their existing assets to become full-blown e-commerce players.

Known until this month as A Better Way of Learning, the company doesn't plan to turn its back on the toll-free direct response advertising model that has spurred its growth into a $50 million powerhouse since being founded by President/CEO Blair Armstrong in 1994. But now Games2Learn is launching a virtual store with products, fulfillment and in-house teleservices already in place - and without help from any online ad networks, e-mail service bureaus, data management companies or outsourced site builders. And he expects online sales to "be at least half our business" before it's all said and done.

"Banner advertising does not work. I think everybody's figured that out by now," said Armstrong, who plans to use the company's existing direct response methods to drive buyers to The firm has put aside $15 million for marketing over the next six months.

"We've spent a lot of money and time and effort in growing this company and the infrastructure that can support the Web, so when we decided to be a fully integrated online education products store, we had a lot of components already in place," he said.

Those components include an internal staff of more than 100 customer service personnel who handle inbound phone calls and fulfillment agreements with services that work exclusively for Games2Learn.

Now the company will tout its URL through the same methods it has used to get buyers onto its phone lines all along: more than 500,000 monthly direct mail pieces to existing customers, educators and others, and national cable ads on media including Nickelodeon, the Discovery Channel and the Learning Channel. The company also advertises nationally on the radio and TV networks.

Fundamentally, the strategy will be about advertising the firm's products rather than its Web site, Armstrong said.

Games2Learn sells reading skills games based on the concept pioneered by Gateway Educational Products, which made the Hooked On Phonics line. That company lost ground when media reports suggested that most students never finished the program, which depends heavily on memorization.

The concept behind phonics is that reading English is easier when people learn its 44 sounds rather than memorizing vocabulary. (The word "phonics" derives from the Phoenicians, an ancient Mediterranean culture that formed its written words by combining pictures representing sounds.)

Games2Learn features as its marquee product The Phonics Game, which differs from the Hooked On Phonics approach by teaching sounds through competitive games rather than with flashcards and the like. The new site will market more than 1,000 products that fit the company's game concept, including goods manufactured by other companies such as Educational Insights, Carson, CA.

Armstrong said Games2Learn will collect parents' e-mail addresses through the site and plans to promote products through to that list. The firm hired consultants to work with it on the e-mail efforts. Links to outside complementary Web sites are in the works, but Armstrong would not identify which companies Games2Learn is talking to, except to say the company is striking the deals without the assistance of the ad networks.

Products will be searchable on the virtual store by name, children's grade level, learning category, game type or through a "Profile Quiz" designed to gauge's children's personalities.

The Internet became a more attractive business medium as the cost of advertising for a single direct response phone call has ballooned, Armstrong said. He reported radio and TV advertising increases of 16 percent each year over the past four years. With a permanent cyberstore the company hopes to get around some of those costs.

Previously, the company operated another Web site that served primarily as a way to steer people to its telesales lines. The firm expects to continue building its offline business this year as well, launching its first paper catalog in the fall.

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