A Brand-Boosting Bid

An ongoing DRTV initiative has helped auction site uBid drive new user registrations at a cost per visitor comparable to online media like paid search.

The one- and two-minute spots began running last November. The goal? To help build a brand that's largely unknown offline, says Paul Soltoff, CEO of uBid's agency SendTec.

Thanks to more traditional marketers shifting dollars to the Web, “acquiring customers online isn't as cost efficient as it was even just last year,” Soltoff says. “TV is a very heavy-lifting medium, with lots of audio and video opportunities to communicate with customers.”

There are more than 5.5 million registered users on uBid, which draws an average of 65,000 new registrations each month. Due to the addition of products such as jewelry, apparel and a variety of home goods, the auction site's customer base is constantly evolving. Originally it was thought to be mostly men (about 70%) with high income and a desire for the latest technology. But with DRTV, you can't be sure who's up at 4 a.m. watching the spots.

“You have research relating to a particular network, such as Sleuth or Sci-Fi, but there are other people who watch it on occasion,” says uBid CEO Robert Tomlinson. “So the next thing you know, you've got a 16- or 18-year-old buying an iPod off uBid who wasn't the core demographic.”

Given the penetration of credit cards in the millennium generation demographic, MTV and MTV2 have been successful channels for uBid. “That's been a pleasant surprise,” Tomlinson says.

Video game/high-tech cable network G4 is one of uBid's top performers in terms of conversion and response. Knowledge like that has enabled uBid to hone its marketing strategy.

“G4 has a very elaborate Web site and a very wide reach of impressions online,” Tomlinson says. “We're now testing that. We're able to turn around the success of cable DRTV and gain intelligence to [help choose] online opportunities.”

The DRTV conversion metrics helped uBid negotiate with G4 to get a workable CPM (cost per thousand). “We gave them our data points to show we were being realistic, as opposed to just trying to get a deal.”

The site defines DRTV success by comparing it with other media such as paid search, which averages 46 to 47 cents per customer, and comparison shopping sites, at 39 to 40 cents.

After the first commercial aired in late November, uBid tested various channels and dayparts (standard daily broadcast time periods). “We really did a classic DM evaluation, testing and retesting,” Tomlinson says.

Traditionally, many marketers use suffixes on URLs (for example, www.ubid.com/tvoffer) to track DRTV effectiveness. “But 95% of consumers never type anything to the right of the ‘.com’ because they consider it like the period in a sentence, so you lose your tracking,” Soltoff says. Instead, uBid used URLs tagged with numeric prefixes like www.01.ubid.com. Still, most customers just type in ubid.com.

“We can't measure that, because it comes into our system as a free referral without a source,” explains Tomlinson. “But SendTec's iFactz system allows us to extrapolate that with the volume of free-referral increases since we launched [DRTV]. Then we can do a bit of fancy regression and get a fairly accurate target of our cost per visitor.”

Thanks to its progress on that front, uBid is now doing 100% continuations and full-blown positioning rather than testing.

“We're ecstatic about that because it's scalable. Paid search and comparison shopping are passive media,” Tomlinson says. “But DRTV is an active medium you can control if you have your economics down pat. That was our No. 1 goal — to self-direct a cost-efficient visitor to uBid.”

As cost per visitor continues to fall, uBid will aggressively ramp up DRTV media spending in the coming months to take advantage of remnant space available in the summer because of programming lulls and reruns. In fact, this month the site will roll out a print campaign in USA Today, which has a circ of 2.3 million.

The auction site initially worked with A. Eicoff & Co. on the DRTV campaign. The Ogilvy division did some of the spot production and strategy work, but shortly after the commercials began airing, uBid took the account over to SendTec, which it was working with on search programs.

“We were looking for more aggressiveness on the media side, and we found that our goals [and A. Eicoff's] were quite different,” Tomlinson says.

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