Quicken Loans’ CMO Todd Lunsford and Qtopia project manager Catherine Buzzitta
One of the Web's hottest new virtual communities may be at the cutting edge of Web 2.0, but it also takes advantage of some of marketing's tried-and-true tools.
Qtopia is a virtual world in which customers of online mortgage lender giant Quicken Loans participate in interactive promotions and games while also managing their mortgage information, accessing educational resources, communicating directly with their mortgage banker, socializing with other customers, and receiving special offers and discounts from national retailers.
“We're an online company and in keeping with that, we've always done online promotions,” says Todd Lunsford, CMO at Quicken Loans. “[They are effective for us] because our customers are used to interacting with us online.”
Qtopia is just one example of how innovative marketers are using digital technology to recraft and define the category of promotions and incentives. Sweepstakes, contests, coupons, events, sampling, and premiums have always played an integral role in consumer marketing. Today, however, it is Web-based promotions using those same strategies that are attracting the attention of marketers and consumers alike.
Web promotions encourage activity
Matthew Kates, VP of strategy at ePrize, which has handled more than 4,000 online promotions for companies like Coca-Cola and Dell — and worked with Quicken Loans on Qtopia — explains that online promotions succeed because they're active rather than passive.
“Telling someone, ‘cut this thing out and sent it in,' doesn't involve much interaction and doesn't form much of a relationship,” he says.
Launched in March, Qtopia is being promoted to more than 300,000 Quicken Loan customers. A sweepstakes promotion, “Win big in Qtopia,” created awareness among clients and provided “non-client” entrants an opportunity to tour the virtual world and learn more about Quicken Loans, according to Qtopia project manager Catherine Buzzitta. Incentives included a $10,000 grand prize and hundreds of instant-win prizes like Blockbuster and Starbucks gift cards. Preliminary data (the sweepstakes ended on May 30) indicate the promotion was a hit.
“We've averaged more than 400 registrants per day, with zero dollars spent on banner ads, paid search, or placement, which we believe is very strong,” Buzzitta says. The company also received 200 mortgage inquiries through Qtopia since its launch. “We had forecast perhaps 20 or so per month,” she reports.
Researchers at Williamsburg, VA-based Borrell Associates Management recently uncovered a new phenomenon: businesses are increasingly shifting marketing dollars from classic online advertising to non-advertising marketing expenses.
According to the company's study, Online Promotions: The Big Shift, released in April 2008, spending for online promotions is expected to nearly triple over the next five years to $22.8 billion, surpassing all other online advertising categories. Web-based promotions are also expected to supplant direct mail and mass advertising.
“Promotions are very measurable. You know exactly what the result is very quickly after you're done,” points out Kip Cassino, Borrell Associates' VP of research.
However, renewed interest in promotions isn't just limited to those that are Web-based, says Nowell Upham, EVP of promotional marketing at Dallas-based The Marketing Arm (an Omnicom agency), whose top clients include American Airlines and Frito-Lay.
“Marketers used to believe that a steady flow of relevant and original advertising messaging would work to shape consumer attitudes and beliefs, and ultimately persuade them into action,” he notes. “Today, smart marketers are forgoing persuasion in favor of negotiation, using promotions to reward a specified behavior.”
Promotions offer quick, measurable results
Upham says he became aware of an emerging, across-the-board spending shift from advertising to promotions about six years ago, when promotions became a winning point of difference in his agency's new business pitches. “I believe the shift in interest has a lot to do with the more measurable and near-term results promotions can offer and the growing demands on marketers to be accountable for ROI,” he explains.
Punctuating Cassino and Upham's opinions, Subway Scrabble, which ran last summer with the help of Catapult Action-Based Marketing, became one of the most successful promotional campaigns in Subway history. And, its quick, measurable results proved the strong value of online promotions. Designed to increase profit margins, visit frequency and in-store traffic, the promotion sought to re-engage customers online with a continuity game. Game pieces on a 32-ounce drink cup provided an instant win possibility for free food and beverages as well as online game play, where customers registered and played in a virtual game space. Online prizes included $100,000 cash, airline tickets, MP3players, vacations and Scrabble games.