24/7 Taps Sweeps Market for Ad Channels

Internet advertising network 24/7 Media Inc. this week said it will begin running sweepstakes on two new online ad channels. But before the New York firm can capitalize on the program, it might have to pacify some advertisers who have misgivings about a service that 24/7 intends to use to build its own user database.

Under the new program, called 24/7 Promotions, 24/7 will use banner ads to entice Web users to enter sweepstakes run for the company's clients. After registering, entrants can opt to receive follow-up e-mails promoting sponsors' products, and they will continue receiving intermittent e-mails until they opt out of the program.

The promotions will run on groups of sites — or ad channels — designed to attract Web surfers who match a particular client's targeted customer base. An airline could, for example, run a sweepstakes that gives away free tickets on sites that attract people making travel plans. The company's two new ad channels will include sites dedicated to travel and personal finance — both high-demand ad categories. 24/7 plans to expand the sweepstakes to its other channels over the next six weeks.

“As far as an overall reach vehicle, we're extraordinarily attractive and we're in a position to deploy a lot of different marketing tactics against that reach. But it's not all about reaching. It's about targeting,” said Joe Apprendi, 24/7 senior vice president for strategic sales. Ads run by the company reach 31 million unique users monthly.

24/7 sells ads on its 24/7 Network, a set of about 150 Web sites organized into 21 content channels targeting teens, parents, job-seekers, auto buyers and several other affinity groups. The company also places ads on the ContentZone, a network of about 2,500 small to medium sites.

But some advertisers have raised eyebrows at the idea of paying for a service that leaves the database in 24/7's hands, and in effect builds a crop of profiles for the company's later use. 24/7 will own the lists of names and send the e-mails through Sift Inc., an e-mail direct marketing firm the company acquired in March.

“I could see a couple different scenarios where, ultimately, the one-to-one dynamic that [advertisers] are looking for, where only their product information gets to the Internet user, might not happen,” said Michele Pelino, senior analyst at technology market research firm The Yankee Group, Boston. “It almost dilutes the value of the profile.”

Indeed, some of 24/7's long-running ad channel clients have expressed concern that their competitors might end up trying to sell to the same names, Apprendi said. However, he added that 24/7 is willing to consider ensuring that names aren't used by competitors, and has even discussed the possibility of sharing ownership of the profiles with clients.

“Everything's pretty much negotiable,” Apprendi said. “We don't have any hard fast rules as we embark on this particular opportunity. It's, 'Let's talk to each client, let's address their concerns, and if we need to make adjustments, we'll make adjustments.' ”

And obviously, no business is going to pay for a program that doesn't succeed in generating valuable sales leads. That hard reality is 24/7's most powerful incentive for satisfying its clients' concerns.

The company has yet to sign any advertisers to the program, which just came out of beta testing. Early talks with 24/7's established clients have gone well, Apprendi said. 24/7 Promotions is the company's first foray into a growing sweepstakes market with a combined online and off-line value estimated at $80 billion.

“We think there's a lot of marketing dollars just earmarked for this kind of ad vehicle,” Apprendi said. “We really think this is going to … get people coming to 24/7 Media for beyond just running banner campaigns. They'll be coming to us with their promotions, and ultimately we can leverage that relationship into a more integrated advertising partnership.”

The price structure for the sweepstakes will vary. Promotions exclusive to one advertiser will cost $150,000 for a four-week banner run, enough time to generate about 70,000 registrants, the company estimates. Banner runs for more than one client will range from $40,000 to $50,000 per client for four weeks. Other clients might pay a minimum fee of $20,000 and then pay 24/7 for exceeding minimum performance criteria. Six-week banner runs also will be available.

24/7 does not currently run targeted marketing campaigns to its existing user database, which contains about 3 million names. The company picked up another 3 million names through its Sift acquisition, but most of those profiles include only e-mail addresses, a 24/7 spokeswoman said.

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