L90 Joins the Promotions Parade

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L90 Inc. has become the latest ad serving company to add a promotions firm. The company announced last week that it is partnering with ePrize Inc., a sweepstakes and promotions company.

This announcement follows DoubleClick Inc.'s acquisition of Flashbase Inc. earlier this month and 24/7 Media's acquisition of iPromotions earlier this year.

L90 cited the same reason as its two competitors for the partnership: The deal adds a necessary component to its portfolio of Internet advertising solutions.

"Obviously sweepstakes and promotions are huge, and they are growing online as well. A lot of campaigns include sweepstakes and promotions," said Matt Spiegel, manager at L90 Inc.'s direct marketing division, Santa Monica, CA. "The problem is we haven't had internal resources to manage legal requirements, writing sweepstakes rules, picking the winners -- all of the back-end stuff. ePrize will be helping us with that now."

The recent actions of Internet advertising companies were inevitable, said Joshua Linker, CEO of ePrize Inc., Detroit. "What's happening is that the big ad serving companies are realizing how powerful sweepstakes and incentives are," he said. "They can either buy a company a la the recent acquisitions, do it themselves -- but that involves a huge amount of ramp up and logistics -- or, as in our case, you partner."

L90 claims its deal was not a knee-jerk reaction to DoubleClick's and 24/7's acquisitions. "Our announcement is [in] no way tied to that happening," Spiegel said. "It was a coincidence. We've been in negotiations with ePrize for a couple of months."

ePrize, which was acquired by Rare Medium Group Inc., New York, late last year, has made a name for itself by offering pooled online drawings. Its "Pooled eDrawings" consist of a number of Web sites, each of which pay a $40,000 yearly fee to offer four $50,000 prizes (one per quarter) of its choice. "The pooled sweepstakes are a solution we can provide right away," said Spiegel.

This is the perfect symbiotic relationship, according to Linker. "Everyone else is acquiring everyone," he said. "We're doing a similar integration without the equity component. They can sell sweepstakes and incentives as a core offering to their clients. It gives us greater distribution of our tools and relationships with [a number of new] advertisers."

Despite the agreement, L90 has not ruled out acquiring a promotions company in the future, according to Spiegel.

ePrize has a 20-person staff and approximately 90 clients, including American Greetings, The New York Times and Lenscrafters.

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