Experian Boosts Stake in Web Loyalty Firm

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Experian Direct Tech announced recently that it has made a second investment for majority ownership in online loyalty and incentive firm MotivationNet Inc. in an apparent effort to revitalize the start-up.


MotivationNet, Schaumburg, IL, in November launched the MyPoints rewards program (www.mypoints.com) in which consumers earn credits toward products and services by clicking on ads, taking surveys, making purchases and other actions at member Web sites.


At launch, MotivationNet's goal was to sign 1 million members by 1999. The program currently claims about 60,000. Bob Hoyler, CEO of MotivationNet, conceded that things haven't panned out as quickly as planned. "We thought marketers would be quicker to act," he said.


Hoyler said part of the problem has been that Internet merger mania has Web marketers' hands full with more fundamental issues than launching loyalty programs.


"Marketers in the online world have so much to do and they don't have a lot of resources to do it," he said. "Secondly, you get a group of people [to agree to implement an online rewards program], and three days later somebody buys them or they buy someone else and then they have to step back and figure out how to integrate it into their plan."


According to a statement released by the two firms, in its newest incarnation, MotivationNet will "serve as an electronic outlet for Internet-based products and services previously available through Experian and Direct Marketing Technology [Direct Tech], which have now been combined under the Experian Direct Tech Banner."


Among the services MotivationNet will offer to Internet marketers are database overlays, enhancement and modeling, and identity verification for online registration programs. The plan capitalizes on MotivationNet's main strength -- information- and technology-rich backing. MotivationNet has access to some powerhouse data now that Great Universal Stores PLC, Manchester, England, plans to make recent acquisition Metromail, Lombard, IL, part of subsidiary and worldwide credit-data supplier Experian.


Metromail's BehaviorBank consumer-lifestyles database covers 30 million people, and its main database -- compiled from public sources including directory, phone company, census tract, real estate, motor vehicle and private source data -- covers more than 140 million individuals. The Experian database contains more than 95 percent of U.S. households.


Also, since Experian, Orange, CA, specializes in the financial services, auto and catalog industries, and Metromail focuses on the retail, telecommunications, packaged good and energy markets, MotivationNet can pitch its services in an array of industries.


As for its affinity-marketing expertise, MotivationNet will offer private-label and co-branded loyalty and incentive marketing programs to larger Internet marketers.


Supplying technology and know-how for private-label rewards programs could be a way to free MotivationNet of what analysts predicted would weigh the MyPoints program down: a relatively unknown brand.


"Combinations like [Experian Direct Tech and MotivationNet] look great from a marketing perspective because they've got all these core competencies," said James McQuivey, an online retail strategies analyst at Forrester Research, Cambridge, MA. "But you've got to answer the question, 'What's in it for the consumer?' You've got to get people to subscribe."


West Shell, CEO of competing online affinity marketing firm NetCentives, San Francisco, said that given consumer fears over data collection and use on the Internet, MotivationNet's business plan may lead clients into a privacy minefield. "Their main strength lies in an area that is potentially very explosive," Shell said.


Hoyler countered that MotivationNet is courting large firms who are well aware of the issues surrounding privacy.


"Experian wants to do business with the trendsetters in this industry and those are the people who have as much at stake [in easing consumer fears over data collection] as anybody," he said.
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