Online Sampling Space Heats Up

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As consumer packaged goods manufacturers like Procter & Gamble, Kraft and Nabisco become more amenable to offering free samples online, there has been a flurry of Web sites popping up to service them.


FreeSamples.com will officially open at the end of the month, joining more established companies like FreeShop.com and other newer competitors such as StartSampling.com.


The main reason such sites are starting to make noise is that "consumer packaged goods companies have just warmed up to the Internet," said Tim Choate, CEO of FreeShop.com Inc., Seattle, an online direct marketing network.


FreeShop.com has done sampling for its clients, but it hasn't been a huge emphasis as "lots of the packaged goods guys were still trying to get their arms around the Internet," Choate said. "It's a huge opportunity as it develops, but it is developing slowly."


Choate expects his company and its more than 600 clients to become more active in the online sampling space within the next three to sixth months.


FreeSamples.com's first order of business is its trade marketing campaign. The site will send a 5,000-piece direct mailer to brand managers later this month with the message "FreeSamples.com. Where Your Target Finds You." The site had full-page print ads in roughly a dozen trade publications such as Ad Week and Brand Week last week.


The goal of the campaign is to generate a good number of samples for the site's launch. "We want to explode out of the gates," said Jeff Malkin, CEO of FreeSamples, San Francisco. "We've signed up 65 brands already, which will be available at the end of the month. StartSampling has been around for nine months and they only have four or five samples available at a time. They've been live longer, but we've been locking up brands for a longer time than they have."


StartSampling has signed more than 25 brands, and it has been pulling in a significant amount of consumers, according to Larry Burns, president/CEO of StartSampling, Carol Stream, IL. "Since launching our campaign in April, we've tripled memberships base. We're reaching 400,000 members. We're confident in our ability to sign long-term lasting relationships."


StartSampling's $3 million consumer campaign is targeting online ages 25 to 44 with print, radio and online elements.


FreeSamples will begin targeting women ages 18 to 45 with a consumer campaign later in the year. The initial consumer efforts will involve co-branded portal deals and $2.5 million in marketing with Conde Nast print and online properties (Conde Nast is an investor in the site).


Despite the growing interest in online sampling there are no guarantees that these newer sites will succeed, Choate said.


"The question is whether or not any of the new entrants can gain a foothold with a unique sampling strategy," he said.


Even if they do create a unique offering, the market may develop too slowly as consumer packaged goods companies still aren't rushing into anything, said Choate. In the meantime, "if they convince [some of the bigger companies] to come online, that's fabulous."
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