Switch From Banners to E-Mail Boosts Push for Wireless Phones
After an e-mail test to 10 million consumers proved promising in January, InPhonic, Washington, a supplier of private-label cell phones and service packages, convinced clients to switch from banner ad campaigns to direct e-mail. As result, the monthly click-through rate increased from 0.5 percent to nearly 4 percent.
According to InPhonic, its customers are garnering conversion rates of 1.5 percent to 4 percent.
For this month's push, online gaming site Sandbox, Reston, VA, will target 2 million people, and Freeze, St. Cloud, MN, a site with a hodgepodge of offerings including free e-mail and computer clip art, will target a projected 20 million people. The lists will be made up of their registered members and names from opt-in lists. So far, the Sandbox e-mails have garnered an average click-through rate of 3.5 percent.
"Compared to the less than 0.5 percent we saw with the banner ads, this is obviously a great improvement," said Alan Laifer, vice president of direct marketing at Sandbox. "For us I believe that targeted e-mails are becoming the best tool to use for our advertising efforts."
Prior to the e-mail campaigns, InPhonic and its partners were running 1.5 billion banner ads a month promoting the phones. David Steinberg, founder/CEO of InPhonic, said the first e-mail campaign of 10 million messages "handily" outperformed the best monthly performance of the 1.5 billion banner ads.
"We managed to increase sales among this entire group of partners 50 percent month over month since January," Steinberg said. "We switched to e-mails because it was becoming increasingly hard to cut through all of the noise on a Web site with a banner ad. With direct e-mails the offer is right in their face, and it is coming from a company they have a relationship with and respect."
Depending on the list segments Freeze targets, click rates range from 2 percent to 15 percent. It uses 10 different lists each month.
"We target a wide range of individuals, including tech-savvy people and music buffs," said Patrick Carlson, director of new business development at Freeze. "Cell phones are very ubiquitous, so we have to target all over the market."
With its banner ad campaigns, Freeze generally drew a nearly 1 percent click-through rate. Carlson said Freeze realizes it takes time for banners to generate positive response numbers and does not plan on abandoning banner ads. But based on the efficiency of using e-mails, he plans on increasing the number of e-mails sent this month to 20 million.
"With e-mails we hit a mass number of people right away and we get the results much quicker," he said. "We are moving a large volume of phones right now. There is enough money being made through this that we have changed our business model to focus more on private-label marketing."
The cost of running these campaigns, which use personalized HTML e-mails, is described as minimal to the user. InPhonic handles everything except for promoting the product, including responses and fulfillment.