Various Ways to Monetize Traffic:
Case Study of Greeting Card Sites

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Sometimes Internet business reminds me of trying to ride a bucking bronco. First, you must decide to stay on for the ride, and then make sure you are leaning in the direction the horse is moving at any given time. If you're like me, you've had to adjust your business plan in various ways, sometimes radically, in order to stay in business.

Here's a brief case study I thought that demonstrates how greeting card sites have adapted to the Internet realities and have learned to monetize their traffic. Note the several business plans they use and see how you might implement some of these ideas to help your own very different business:

Greeting card sites began primarily as a novelty in search of a revenue stream. Some attracted large followings. Here are the various revenue approaches I see currently:

1. Paid advertisements

Few sites are able to exist on prepaid advertisements alone. This is partly because few greeting card sites attract targeted traffic. Most of the visitors have no common demographic, except that more women send online greeting cards than men. Untargeted advertising brings very low CPMs (that is, low "cost per thousand" banner view prices). Nevertheless, most of the greeting card companies I surveyed included ads of one kind or another. Hallmark is much less garish and more subdued, in keeping with their brand name image.

2. Affiliate Programs

Some e-card site use affiliate programs with pay per click (PPC) or cost per action (CPA) models. In these situations, the advertiser only pays when a visitor clicks through or makes a purchase. For untargeted advertising, these models make sense. Yahoo! Greetings (http://greetings.yahoo.com) doesn't ask for much until after you have sent a card. Then it asks you whether you'd like to send a gift certificate using GiftCertificate.com. When you preview a card, Greeting-Cards.com asks you, "Add flowers or a gift?" They partner with ProFlowers.com and SalvyTheFlorist.com for flowers and gifts.

3. Opt-in e-mail lists

Greeting-Cards.com encourages users to sign up to be free members. Membership offers storing mail addresses for paper cards, e-mail addresses for e-cards, birthday and special occasion reminders, and a record of cards sent. In exchange, they hope you'll leave checked the boxes where you opt in or opt out to receive various newsletters and special offers (i.e., opt-in commercial e-mail advertisements). In the process of registering you give valuable information such as your first and last names, address, gender, date of birth, and ZIP code. At least gender and ZIP code allow for ad targeting. Opt-in lists such as this one can be rented by a list broker or list manager for perhaps $150 CPM or more (gross). When I signed up initially, I opted out of these lists, but when I got ready to send an e-card, I was asked again to opt in (with pre-checked boxes). They're working hard at building their lists.

4. Mailing paper cards with a personalized message

Greeting-Cards.com sends a card of your choice to a friend's snail mail address for $1.93 (including a 34¢ first class stamp). Hallmark.com allows you to browse their regular cards. They will mail the card for you with a personalized message, or, for a bit less, they'll mail the card to you so you can personalize it yourself.

5. Direct e-commerce sales

Hallmark.com offers many free cards, but asks whether you would like to attach a Gift Wish Certificate in denominations of $10 to $100 that can be redeemed in over 300 US retail chains. Amazon.com's e-cards (www.amazon.com/ecards) encourages senders to attach an Amazon.com gift certificate or send a gift-wrapped item from their gift store. Of course, Hallmark.com and Amazon.com have their own variety of gifts to sell, so don't appear to partner with affiliate programs.

6. Paid subscription

BlueMountain.com was the undisputed leader among e-card sites, but had an unclear revenue stream. Excite bought it and later sold it to AmericanGreetings.com. It now offers a few free cards in each category, but charges $11.95 annually for a subscription to access and send all their cards in unlimited numbers.

Marketing Approaches

One common marketing approach is to get visitors to fill out a reminder form that will e-mail them with upcoming birthdays, anniversaries, and special occasions. Their database driven system automatically e-mails reminders a few days before the event, encourages members to send a card -- suggesting several gifts that are appropriate to the age and gender of the intended recipient.

E-mail greeting cards can have a viral marketing component. They typically ask the recipient if he or she wants to reply with a free greeting card -- and at the same time they sign up this new sender in their event-driven reminder database. One sender sends to her network of friends, who send to theirs, who send to theirs in an ever-widening circle.

It's also possible to set up your own site using shareware greeting or postcard programs that range from free to about $300. (http://cgi.resourceindex.com/Programs_and_Scripts/Perl/Postcards/) These programs are much less sophisticated than the leading e-card sites, of course, but they have the basics.

For more information on greeting card business models search on "greeting" in my e-commerce and marketing articles database (www.wilsonweb.com/research) and see Tom Mainelli, "Procrastinators Beware: Some Holiday E-Cards Charge," PC World, December 18, 2001. http://www.pcworld.com/news/article/0,aid,76084,tk,dn121801X,00.asp