How Interest!ALERT is Taking Clients From ScreamingMedia

We were idly surfing one day when we came across the Interest!ALERT Web site. To be frank it looks mom-and-pop-ish. Something a part-time entrepreneur whipped up in their home office. But, we diligently shot over an email to learn more.

Turns out Interest!ALERT is the online arm of a very established company. And they're starting to give ScreamingMedia a run for their money. They promised us they'd make their home page a bit glossier soon. In the meantime, this company appears to be one that publishers and syndicators alike should be tracking, and even considering doing deals with. Here's their story....

CHALLENGE
CP Software Group in Folsom CA has been offering automated news item routing and mark-up work for media companies - such as NewsCorp - for more than a decade. Interest!ALERT President Karan Eriksson gives an example, "CP's routing technology tags whether a story is about OJ the juice or the murder."

Last summer the company decided to find a way to profit on the Internet. So they partnered with McClatchy Company's Nando Media division to create a new service. Nando would send CP a newsfeed with about 50 categories containing stories "human editors" had already examined for quality. Then CP's new Interest!ALERT division would add further tags, and then market and route the feeds to webmasters seeking content for their sites.

The only problem was that by Summer of 2000, the webmaster content-buying market place was not only beginning to reach saturation, it also was dominated already by three major players -- ScreamingMedia offering topical content feeds, iSyndicate offering branded content feeds and Moreover offering topical B-to-B headline feeds.

CAMPAIGN
Unlike its competitors, Interest!ALERT didn't have significant start-up costs. Most of the technology, facilities and some staff were already in place. So they were able to undercut potential competitors' prices right from the start and provide quality news summary feeds to an underserved market -- mid-sized business sites' webmasters.

Eriksson says, "The others try to get $1000 a month. We tried to figure out how to automate so our prices could come down and be low cost. $1000 a month is over most webmasters' purchase order limits. However, people are always willing to spend a little bit of money. So our prices start at $30-$300 a month depending on what you're doing."

Interest!ALERT was also designed to please those webmasters in three significant ways beyond low pricing:

1. Speed of download. Since multiple studies in the past year have revealed that slow sites lose visitors, webmasters have been under pressure to add more features to make their sites stickier without affecting speed. Eriksson says, "One issue with headline services is how fast are they? We are very fast, very efficient."

2. Speed of integration. Even customized versions of Interest!ALERT are designed for almost instant, automated installation. Eriksson says, "As we're talking to them on the phone, it's going on their site right in front of them. They're saying 'Oh wow this is great!'"

3. Customized email newsletters. While the Web site content market was already reaching maturity by mid-2000, the corporate marketplace for promotional email newsletters was just beginning to take off. Interest!ALERT decided to offer a baseline newsletter service whereby corporate marketers could purchase content to put into their own newsletter, as well as a fully automated service whereby Interest!ALERT would create and distribute newsletters to that marketer's list on their behalf.

The newsletter service is fairly sophisticated. Interest!ALERT can help marketers set up autoresponders based on click throughs so if a reader clicks on a particular offer but doesn't purchase they are contacted a few days later with a special reminder note about that offer. Eriksson notes, "We help them create a dialog without abusing the customer. Sometimes they'll say, 'Oh response was so great let's do it a million times!' and we go, 'No, no no.' We're the voice of reason."

Marketers can also purchase statistics reports to learn about open rates and click through rates. Plus, they can use click through data to continually personalize newsletter content toward recipient's interests. For an additional low monthly fee of course.

Interest!ALERT markets its site feeds and newsletter services by copying Moreover's low-cost viral tactic of offering any and all sites a free, branded, headline news feed. Webmasters who join the company's affiliate program can earn commissions for referrals. Surfers who click on the Interest!ALERT logo on someone else's site are taken to an information page offering them a free news feed for their own site as well. From there they are upsold as they request more sophisticated services, such as a more customized feed.

RESULTS
As of June 2001, Interest!ALERT had about 4,000 sites taking content, ranging from free accounts to $25k per year accounts. An average of 20% of free accounts convert to become paying clients, with an average account size of $8,000 per year.

The viral marketing campaign started slowly, averaging just 10 new site sign-ups a month but now the company averages 800 new site sign ups per month. Eriksson says, "I didn't believe in this viral thing at first - but oh my gosh! For example, one political site picked us up and now we're on tons and tons of political sites."

From there, the low pricing and automated installation make upselling relatively easy. Eriksson says, "We don't convince them to buy content. We give them free content and it works. We talk to guys all day long and take credit card orders from them."

And yes, despite the fact that they initially targeted lower-end clients, Interest!ALERT has begun taking business away from the higher end players. Eriksson says, "The whole business really is just a service business in my opinion. People call and say, 'I need this, this, this and this.' And you just say, 'This is $20, this is $50,' etc. But it isn't like, 'OK that's $35,000 just for breathing.' We took a deal from ScreamingMedia because we were $40,000 less in pricing."

PARTNERSHIPS: Eriksson asked us to pass the word that she's interested in three types of partnerships:

1. Webmasters - Ericksson encourages you to join their affiliate program. It's handy timing as Moreover's similar program is closing down July 1st as they switch gears to focus on the corporate enterprise marketplace.

2. Publishers - if you'd like to get hotlinked headlines or hotlinked article summaries run through InternetALERT's service, contact them. They will evaluate each publisher before adding them to the newsfeed. Ericksson says, "I do want Car & Driver, I don't want Joe's Internet Site." So far Rolling Stone, InfoWorld and Forbes are all distributing hotlinked content through this system. The service is free for about 90% of publishers, Interest!ALERT will only charge you if your site makes it hard for their robots to automatically pick up content.

3. Other syndicators, wires and news feeds - Ericksson notes, "We are a venture development firm." They have acquired related companies in the recent past and are interested in talking with others about everything from acquisitions to partnerships.