D R A F T 1 . 4
Deals & Dreams 2.0 Product Plan Peter Svensk
Introduction
The purpose of this document is to:
Define objectives of Deals & Dreams 2.0
Present revenue forecasts and an operating plan for FY2000
Evaluate alternative publishing companies
Explore other options for the future of these products
Objectives of Deals & Dreams 2.0
1. Increase program performance and revenue potential by unifying sales approach of both current programs 1.1. Establish CPM-based pricing based on tier and position for all participants 1.2. Transition term contracts from @Home to new “pay-to-play” model 2. Split revenues between Excite Commerce and MLI in light of new shared responsibilities 3. Increase revenue opportunities by expanding the universe of merchants 4. Improve the value proposition to the consumer by offering exclusive offers and incentives 5. Enhance the consumer experience 5.1. Support Rich HTML content when clients support it 5.2. Target offers to segmented affinity groups so offers are more relevant 6. Support the latest consumer privacy standards 6.1. Utilize MLI customer service interface (opt-in and opt-out management) 6.2. Ask current @Home subs to opt-in or out of the current @Home Deals & Dreams 7. Provide merchants with better reporting capabilities 7.1. Report clicks as well as impressions 7.2. Support the use of pings on the merchant site, so click-trails may be reported 8. Use fewer resources by integrating the two current products into one program 9. Focus on core competencies of both organizations (Excite@Home Commerce and Matchlogic Email Services) 9.1. Rely on Excite Commerce group to define and evaluate prospective partners and merchandise 9.2. Rely on MatchLogic’s expertise in delivering large-scale targeted email campaigns and managing privacy issues
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Current Products
At present, there are two ongoing co-op email campaigns being produced under the moniker “Deals & Dreams,” one sent weekly to most @Home broadband service subscribers (600k), and one sent every other week to a random sub-selection (500k) of Excite narrowband registered users. These are essentially “merchandising newsletters” featuring a number of advertiser-supplied promotional offers to recipients of the e-mail. To see an example of the current products, see:
@Home Deals & Dreams (produced by Commerce team, list managed and published by @Home)
Excite Deals & Dreams (produced, list managed and published by MatchLogic)
Consolidating Excite Deals & Dreams with @Home Deals & Dreams There are several areas where the two current products are not in alignment. The goal of Deals & Dreams 2.0 is to consolidate the production and publishing processes for these mailings, while improving the consumer experience, and maximizing the revenue potential. Because the list is generated and Excite Commerce will assume most production tasks, but MLI will publish and track performance, revenues will be split between Excite and MLI.
Engineering Costs
List Management And Publishing This is the most problematic problem facing between the two current products. There is a detailed technical overview that details the current problems with @Home publishing the @Home Deals & Dreams (as well as a number of other @Home e-mail products).
Without going into exhaustive technical detail, there are two options for moving list management and publishing to MatchLogic. The first option is very expensive, and involves fully co-locating MatchLogic’s proprietary system to @Home’s backbone to facilitate mail list management:migrating @Home list and publishing services to MatchLogic. Assumptions include total list size of 3MM, projected to end of FY2000.
Projected FY2000 expenditures required for full co-location of ML system to @Home’s backbone (push from @Home domain) for Deals & Dreams 2.0
Webserver Mailserver Push server Relays, local directors ½ time engineer Operations support $175,000 ~ $200,000
Projected FY2000 expenditures required for partial co-location of ML system (push from MLI domain) for Deals & Dreams 2.0
Additional ML hardware ½ time engineer Operations support $60,000 ~ $75,000
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Deals & Dreams 2.0 Product Plan Peter Svensk
Operating Costs
Projected FY2000 operating costs required for managing and producing Deals & Dreams 2.0
Product Manager ½ time $45,000 Traffic and production manager ½ time 20,000 Editorial writer ½ time 20,000 Contingency expenses 5,000
$90,000.00
Current Revenues The sales arrangements also differ between the two products. @Home Deals & Dreams delivers impressions to merchant partners as part of term contracts for total impressions on the @Home service, including the @Home Shopping Channel, as well as Deals & Dreams.
Excite Deals & Dreams is now sold on a CPM basis to a pool of Excite advertisers at a CPM of $30–$45. However, because ML is producing and publishing, their organization realizes the revenues.
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Future Revenues Excite Deals & Dreams projected FY2000 revenue
Assumptions: Pool of 20+ advertisers. Each mailing has 10 avails. Pushed to 600k every other week
CPM Rev per 600k push Revs over year
Premier Slot 1 $45.00 $27,000.00 $648,000.00 Premier Slot 1 $45.00 $27,000.00 $648,000.00 Slot 2 $35.00 $21,000.00 $504,000.00 Slot 3 $35.00 $21,000.00 $504,000.00 Slot 4 $35.00 $21,000.00 $504,000.00 Slot 5 $35.00 $21,000.00 $504,000.00 Slot 6 $35.00 $21,000.00 $504,000.00 Slot 7 $35.00 $21,000.00 $504,000.00 Slot 8 $35.00 $21,000.00 $504,000.00
$4,824,000.00
@Home Deals & Dreams projected FY2000 revenues
Assumptions: Same pool of 20+ advertisers. Each mailing has 10 avails. Pushed to 400k every other week
CPM Rev per 400k push Revs over year Premier Slot 1 $45.00 $18,000.00 $432,000.00 Premier Slot 1 $45.00 $18,000.00 $432,000.00 Slot 2 $30.00 $12,000.00 $288,000.00 Slot 3 $30.00 $12,000.00 $288,000.00 Slot 4 $30.00 $12,000.00 $288,000.00 Slot 5 $30.00 $12,000.00 $288,000.00 Slot 6 $30.00 $12,000.00 $288,000.00 Slot 7 $30.00 $12,000.00 $288,000.00 Slot 8 $30.00 $12,000.00 $288,000.00 $2,880,000.00
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Current Format The @Home version uses HTML formatting, including tables, as @Home users are supplied with the latest email clients. The Excite version is actually a multi-part MIME file with less HTML formatting to support a wide range of email clients and appears as text on older clients which don’t support HTML mail.
Both products include an editorial introduction to the theme of the mailing, along with a topical editorial piece generally covering issues relevant to Web shoppers.
Offer presentations differ in that the @Home product has two tiers: “Picks of the Week,” a set of three featured offers with larger images, and longer copy blocks; and several “Premier Merchants,” with smaller images and shorter copy blocks. Themed Editorial Intro
Excite Deals & Dreams typically feature six slots per mailing, with each position having stacked prominence and no “featured” slots. Images are typically similar to banner ads. Premier Slot 1
Both products typically feature one slot for a house promotion.
Future Format (at right) The future design will accommodate 10 ad Premier Slot 2 avails with 2 of those featured prominently above the fold.
In the @Home version, rich media (GIF animations, Flash, Java, etc.) may be used in Slot 3 Slot 4 the top 2 premier slots.
Like the current format, a themed editorial introduction appears at the top, ads in the Slot 5 Slot 6 middle, and the themed editorial piece closing the email below the fold.
Slot 7 Slot 8
Slot 9 Slot 10
Themed Editorial
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Frequency @Home Deals & Dreams is mailed weekly; Excite Deals & Dreams bi-monthly. As Excite has limitations on the number of touches, Deals & Dreams 2.0 will also be restricted to bi-monthly delivery. This is a change that needs to be carefully communicated to current @Home Deals & Dreams participants.
Privacy Currently all new @Home subscribers are automatically opted-in to receiving Deals & Dreams when their subscription begins. While this is appropriate for service alerts, it is not a supported practice in the view of most privacy groups, including MLI’s privacy consultant.
Excite Deals & Dreams is pushed only to those who opt-in to Excite mailings when they become an Excite registered member.
It is recommended that current recipients of @Home Deals & Dreams be presented with an opportunity to opt-out, as they have not been given this chance. This is a tenet of permission marketing.
Reporting @Home provides basic delivered impressions reporting to participants. MLI provides for Excite Deals & Dreams reporting on delivered impressions, click-throughs, and supports the use of pings for click-trail information at the merchant-end.
Other Publishing Alternatives While the Excite product is produced and pushed by Matchlogic, the @Home product is being produced by the Excite Commerce team, and pushed by the @Home Content Group.
While it is clear that MatchLogic is far better suited to publishing this product, there are other e-mail service providers that could publish this product, at significant expense. Here is a summary:
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Digital-Impact 177 Boyet Road Suite 300, San Mateo CA. 94402 650.356.3400 www.digital-impact.com
General Digital Impact functions primarily as a service bureau providing hosting and Description push services, and is focused on providing three core benefits to their clients; personalized content, HTML Sensing, Tracking within Email. Complete campaign planning services are included in customer contracts which cover all test copies, consulting on content and creative as well as any value added analysis.
Personalized Content: The firm first assists clients with list segmentation, primarily house files but also rented Opt-in lists. The first pass focuses on the use of rules, or what MatchLogic terms Boolean selects. The second pass involves collaborative filtering, also known as the nearest neighbor model. Collaborative filtering involves the analysis of known customer behavior and comparing this behavior with that of other customers. This information is then built into Email offerings and creates a custom offering for each of the recipients on a mailing list. A strong example would be the way in which Amazon.com recommends new book purchases based on past purchasing behavior. Amazon.com and CDNow both use this type of Email offering to enhance customer relationships and to solicit further purchasing from their existing customer base.
HTML Sensing: The firm poses a proprietary sensing technology that allows detection of the Email client used, and the ability to read text, HTML, DHTML, and AOL. This information is then appended to the clients database, and future Emails can then be optimized for the readers browser capabilities
Track within Email: When tracking click-through within an Email offering, the firm tracks which icon is clicked, what time of day, and what day of the week the click is presented. This information is then analyzed and presented to the client to enable a better understanding of the customer base.
Reporting is daily, and consists of the standard types of report information. Click-through, bounce, unsub, etc. This information is also fed back into the customer affinity profile and can be analyzed for recommendations on frequency of contact.
When a campaign is complete, value-added analysis is offered.
Summary While Digital-Impact is certainly very good with what they do, they do not specialize in what MatchLogic does with DeliverE. Their specialty is in assisting companies in maximizing the lifetime value of their existing client base and associated house files with respect to creating repeat revenue. MatchLogic is strongest in lead generation and prospecting. If a customer is looking to increase their customer base, ML is the ideal choice.
Exactis
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707 17th Street Suite 2850, Denver, CO 80202 303.675.2300 www.exactis.com
General Exactis is an Email Service Bureau. Clients house their lists with Exactis, and Description Exactis handles all list hygiene and push functions. Email can be triggered by an event, such as a purchase, or the client can send direct mail to their existing list. The client interfaces with their list, and submits content through a web- based interface.
The interface provides workflow management tools, archiving of past work, and is accessible through a searchable database. Both text and HTML can be supported.
There is a full range of reporting available. The reporting is focused around detailing mailing activity. Reports are also archived and searchable
Pricing $20-80 CPM
Minimum monthly charge is $1000 per month and a one year contract,
Summary Exactis is positioned around helping clients to maintain and use their existing client database to enhance and maintain the relationships that exist among existing clients. Their core does not include the push third party opt-in lists or lead generation through the use of non-customer lists. ML’s service offering is the perfect tool for generating new business.
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MessageMedia Herndon, VA 703.707.8261 www.lifeminders.com
General The Lifeminders product most closely resembles the ML co-op offering. Description Individuals sign-up for newsletters that provide content based information (selecting either text or HTML formats) in the following categories:
Family, Entertainment, Home & Garden, Personal Finance, Auto, Personal Events, and Health/Nutrition
The newsletters are sent at frequencies ranging from weekly to monthly. The advertising opportunities come in two flavors sponsorships and general advertising. The sponsorship carries prominent brand images through out the newsletter, and the general advertising, provides placement within the content of the letter. Advertisers can profile based on Geographic ( city, state, zip) or Demographic ( age, income level, education) profiles. Html Email have format filtering and optimize for HTML, RTF, and AOL.
Lifeminders has 5.4MM member profiles of which 60% are registered as preferring HTML based Emailings.
Pricing Campaign costs:
Sponsorship………………… $150 CPM and a 3mos. commitment
General Advertising………….$30-200 CPM based on placement, newsletter, profiling, etc.
Summary The Lifeminders offering is first and foremost a newsletter. The sponsorship advertising provides visibility for brand building, but will never be as strong in proposing a call to action as direct targeted Email. As for the general advertising, the story is the same, but the visibility is not nearly as strong.
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MyPoints/BonusPoints 800.890.9351 www.mypointsinc.com
General My Points is an online loyalty program. Members of the program get points, Description which carry value against purchases made on the site in exchange for reading Emails, visiting sponsor sites, making purchases, and providing demographic information about themselves. Providers of goods and services can purchase sponsorships, which include advertising in regularly scheduled newsletters and space within the site. Or advertisers can simply purchase access to the list in order to send targeted Email in either text or HTML.
Along with the Email comes a full range of reporting on the standard categories including a demographic breakdown of respondents. Because MyPoints is incentiveized, they claim to get better response rates
Pricing CPM: $250 includes 25 points, three demographic selects, ad layout and mailing
CPC: $600 includes 25 points, three demographic selects, ad layout and mailing
Additional points : $1.60 per 100 points
Additional selects: $20 per thousand, $50 per thousand for CPC campaigns; 535 to choose from
Creative: $500 flat rate
Copy : $1500 flat rate
Summary This avenue is definitely one with potential. The question is whether or not it is good for all types of services. The types of people that are going to regularly purchase through this site are likely to be interested in getting the best “deal.” What this may translate into for the advertiser is deceptive click-through (response), driven by people clicking through solely for the purpose of collecting points. Secondly, the consumers that do make a purchase are likely to have a relatively low lifetime value, showing no brand loyalty and switching at the first sign of more points.
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PostMasterDirect/NetCreations 379 West Broadway Suite 202, New York NY 10012 212.625.1370 www.postmasterdirect.com
General PostMasterDirect is the “low cost,” low service provider. Order generation Description including list selection, select selection, message composition, and the push are all done through a web-based interface. They’re about 125 list categories, and selects are limited to geographic, job functions, and job type. It is also possible to keep track of previous mailings and perform a merge purge. If multiple lists are used, the final push list is de-duped. The list sources include lists owned by PostMasterDirect and those that are managed by the firm. In all these provide for 3MM unique names from 9,000 lists. While the firm does not provide any consultation on message copy, they do provide a free mailer on writing Email copy. Old message can be stored for future use.
The firm also provides push services.
When the Hosts/manages other lists, the revenues are split 50/50.
Pricing Campaign costs:
Campaign Rate….. $100-$300 CPM $400 minimum order
Push Rate only ………….$50 CPM 100,000 name minimum
Summary While PostMasterDirect offers a similar array of services to that of ML, they are the low cost/low service provider. When implementing a campaign, the customer needs to have some degree of technical knowledge to compose the Email, insert HTML, and provide the appropriate code to enable tracking. Additionally, the selects are not very rich, and there is little if any support throughout the campaign planning process or in the campaign evaluation process. If the client is seeking a do it yourself solution, this may be the place to go. If not, the ML solution is certainly a more robust approach to any clients Email marketing goals.
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Sift 408.541.7633 www.sift.com
General Sift is a 24/7 Media company. The focus of Sift is promotion and retention, and Description the firm takes more of a database view of the world. The specialization is cluster analysis, predictive modeling, and data enrichment for the purpose of enhanced list performance. If a client brings an Email list, which also has a name and a postal address, the list can be mapped to more than 200 data elements. The firm helps to plan Email campaigns including content/creative creation, and past campaign analysis. When mailings are sent, a Mime format is used, and information is collected and appended to the database to optimize future mailings.
The firm is also retained by list owners to “monetize” inventory. Sift will assist in list acquisition planning, creation of opt-in statements, host the list, and manage the list. Sift has a total of 1MM names in over 3,00 product categories available to push to, through the SIFT Net-List network
There are two levels of reporting, both of which are included in the fees for the campaign. The first is real-time interactive reporting, which carries items such as delivered, bounced, opt-out, and bingo-cards. They can also tie web forms back to the campaign. After the campaign is complete a more detailed report is provided.
Pricing Campaign costs :
List Host….. $Free
Push Rate…..$50-100 CPM if out of network; Free if in the 24/7 network, or if Sift has the rights to sell ad space, with a 50/50 revenue split on all ad space sold by Sift.
Sift List used.$250 CPM = the cost of list rental $20-40
Copy/Creative: $200-500
Summary The Sift network of names comes a decentralized band of companies each collecting names and making them available to SIFT for use. While sift can make recommendations as to how names should be collected and what type of data should be collected, the list owners have the ultimate control. Sift’s expertise and strength comes from helping clients to maximize revenue from house-files, not re-selling traditional direct mail pieces. ML’s names are centrally collected and controlled, allowing for more consistent data collection across the file, allowing for better results from the list. The ML is also more than twice as large as the SIFT list, provide a more robust universe to work from. ML is focused on direct Email, not list enrichment.
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Other thoughts
For any permission-based e-mail product like Deals & Dreams to succeed, four key elements must be present: a list, a plan, delivery capability, and performance analysis.
The list provides the ultimate destination of the e-mail product; and it should have strong reach and rich depth. Planning and analysis ensure that, on the front end, the product is successful, and on the back end, that the richness of the medium is not lost. Delivery is the technological infrastructure necessary to get the e- mail to the targeted recipient.
For Deals & Dreams, the lists come from two distinct sources, @Home’s BOS system and Excite’s URS. The cost of attaining these lists is essentially funded by all marketing, loyalty, and product efforts throughout Excite@Home.
Excite registrations account for about 60% (7.2M names) of the entire ML list, providing significant length, however, the breadth and depth of information collected is absent. This makes the Excite source of names unsuitable for sending targeted e-mail. Without targeting, the names are not used to source the DeliverE offering, they are used to source untargeted Co-op offerings such as Excite Deals and Dreams.
So, while impossible to determine exactly how much we, as an organization, spend to acquire each “permission,” or valid e-mail address, the more (and most) important question is: What is the lifetime value of each e-mail address, or customer?
Seth Godin, V.P. of Direct Marketing at Yahoo! emphasizes the danger of over-harvesting lists in Permission Marketing (p. 238). We must be careful not to jeopardize our ability to communicate future messages to our users by bombarding them with untargeted advertising messages with little or no relevancy to their lives. As Mr. Godin states, “Permission marketing is anticipated, relevant, and personal.” (p. 43)
Contacts MatchLogic Excite @Home
Project Lead Peter Svensk
Scheduling Joanne Mullen Darci Deleon
Editorial Darci Deleon
Engineering Cody Payne Dave Low?
Partner Facilitation & Acct Mgt/Partner Svcs Acct Mgt/Partner Svcs Asset management
Content Approval Kirsten Hoefer Kirsten Hoefer
QA Joann Mullen Darci Deleon
Channel Support Mark Glasco (Direct Banks Baker Team, MLI Enterprise, (Commerce Team, MLI Acct Mgt Partner Services)
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