Type in the word "free" on Yahoo! and you get more than 14,000 results. And that's no surprise.
Offering cash and prizes as incentives to visit a Web site is a rising trend among companies trying to compete for attention among hundreds of thousands of consumer sites.
But does the "click here to win" approach work? Not really, according to a recent study by research firm Jupiter Communications.
"I think the issue of clutter is becoming more and more problematic," said Jupiter analyst Marissa Gluck. "A lot of guys are trying to break through that with bribery, but that's a short-term tactic."
The Jupiter study revealed that among the tactics commerce sites use to attract customers, sweepstakes promotions are used more than any other approach.
In fact, 76 percent of commerce sites use sweepstakes, even though that tactic is the least likely to convert casual visitors into customers.
It's not just commerce sites that use sweepstakes to try getting people to visit a site. iWon.com, a newly launched portal site, will give away almost $18 million by April 17, 2000. The site gives away $10,000 a day, as well as several million-dollar prizes, in an effort to attract attention in the saturated portal market.
Showing the money
"The giveaway feature was a must-have for us, given the time we entered the market," explained iWon co-CEO Jonas Steinman. "We needed a unique selling point to get people's attention."
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'If we started giving a dollar a day away, I think we'd be a much less popular site.'
-- iWon co-CEO Jonas Steinman
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The tactic appears to be working, at least initially. CBS recently acquired a majority stake in iWon in a deal worth $70 million. Steinman reports traffic to the site has been increasing dramatically since its launch Oct. 5. But, he acknowledges, that's largely due to the money, not the site itself.
"If we started giving a dollar a day away, I think we'd be a much less popular site," he said.
Jupiter's research supports Steinman's remark. Despite statistics that show consumers participating in online sweepstakes has risen from 37 percent in 1998, to its current high of 49 percent, the study concludes sites are conditioning users to expect unrealistic rewards for normal Web activity.
"These big sweepstakes get people to come to your site, but when you use sweepstakes to draw people to your site, nine times out of 10 it's not going to get them to buy, explained Jupiter analyst Melissa Shore.
Forget stickiness
That's fine with Scott Lynn, founder and president of TreeLoot.com. TreeLoot encourages people to click around an image of a "money tree" for the chance to win up to $25,000.
"I don't believe in stickiness," said Lynn, referring to the concept that a Web site should keep users coming back for more. "I don't think anyone can develop a Web site that's sticky. I don't think loyalty exists on the Internet. It's too easy to switch around.
"We simply intend to have people stay around long enough for us to make money and then we send them off to our advertisers," he added.
While that approach may work temporarily in conjunction with Lynn's basic, advertising-based revenue model, it doesn't leave room for growth according to Jupiter's Gluck. "There's a certain type of person that enters sweepstakes. That applies to both the online and offline world."
Traditional offline sweepstakes companies have been targeting a specific audience for decades with tremendous success. Those same companies are now turning to the Web, hoping to expand that audience with additional Internet-only giveaways.
Publisher's Clearinghouse, famous for its multi-million dollar giveaway on Super Bowl Sunday, offers daily $1,000 giveaways on its Web site, pch.com, as well as material prizes like cookware.
American Family, another big name in offline sweepstakes, uses its Web site, americanfamily.com, to offer tips on how to win.
A number of other sites, including AllAdvantage.com and Sweepstakes Online, offer users the chance to earn or win money by surfing the Internet. The data collected from observing visitors' surfing habits is used to serve up targeted advertising.
'It just makes sense'
The proliferation of giveaways and sweepstakes on the Web comes as no surprise to iWon's Steinman.
"I think giveaways and other promotions are a proven strategy," he said. "We're not reinventing the wheel in that sense. So I don't see why it would be a bad thing for companies to try that tactic online. It just makes sense."
For Steinman, the concern that users will stop visiting a site once it stops offering sweepstakes is irrelevant: iWon plans to give away money indefinitely. So does TreeLoot.
That's not necessarily good news for those companies' bottom lines, but it's great news for Web surfers willing to take a chance with Lady Luck.
