Promotions Put Premium on Online Connections

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Promotions Put Premium on Online Connections
Back at You's Michael Glazer at the startup's Encino office.

When Niloo Kia, founder of a corporate promotional item and gift basket company, wanted to get more fans on Facebook, she turned to Back at You Inc., an Encino startup that helps companies conduct contests and coupon giveaways.

Her company, Bovary & Butterfly, held a contest for a summer gift basket. During the 30 days of the promotion, the company’s Facebook fan base increased from 150 to 940 people. The price was $70 plus the cost of the prize. The company is now planning a similar promotion in the fall.

“We have not tried other online promotions as they have been either cost prohibitive or complex,” said Kia, adding that Back at You offers a good way for small businesses to test online promotions.

Michael Glazer, chief executive at Back at You, said he started the company to give small businesses a do-it-yourself way to attract an audience on Facebook and Twitter. Back at You publicly opened for business three weeks ago after trial runs during the summer that included the Bovary & Butterfly promotion.

In a typical promotion, a small business visits BackatYou.com and selects a type of promotion and the time period it will run. The company inputs some copy describing the prize or discount and then lets the Back at You technology publicize the promotion.

On Facebook, a message is posted to the company’s page and its existing fans receive an e-mail announcement. When those fans sign up for a contest or coupon, news of their action is sent to all their friends’ pages letting them know about the contest.

“Current fans work as the seeds to spread it to their friends,” Glazer said.

The same logic works on Twitter. If a friend joins a contest, the friend’s followers may see that happening on their feed and may do the same.

Back at You charges according to the length of a promotion. Prices start at $20, including a $10 setup fee plus $2 per day for five days. Promotions can last as long as 180 days for $300. The fee covers the technology to get the promotion onto social media sites, phone consultations to help the business design the promotion and statistics tracking the results of the promotion.

A current Back at You promotion is for TheBump.com, a website for pregnant women. TheBump’s Facebook page features a contest for a baby stroller.

“The incentive is what moves the needle,” Glazer said. “We work with business to create the incentive that gets you the right audience. If a 28-year-old woman signs up for the contest, it spreads to her friends, who are mostly in the same demographic group. It’s a perfect audience for the advertiser.”

Growing crop

Not all are so sanguine about the process.

Nathaniel Perez, head of social experience at digital advertising consultancy SapientNitro in New York, said such promotions might not result in immediate sales gains, and most small businesses want a short cycle between advertising and sales increases. Mobile phone marketing and search engine optimization can spur transactions faster than Facebook and Twitter, he noted.

Back at You is one of a growing crop of companies that focuses on social marketing. Perez believes they have a profitable future in the short term, but eventually small advertisers will want a marketing agency that can handle a number of online sales channels, not just Facebook and/or Twitter. Specifically, he pointed to larger companies such as Reach Local in Woodland Hills and Constant Contact in Waltham, Mass.

Before starting Back at You, Glazer worked as co-founder of Sodahead, a polling site in Encino. His partner in Back at You is Eric Gaygeshian, a former executive at Sodahead and founder of TwitRound, a site that distributes background images for tweets on Twitter.

The partners financed Back at You, which currently has four employees, with money from previous ventures. Now they’re looking for venture capital or angel investors.

The company’s next step is to grow its customer base of small companies while simultaneously launching a service for large customers, such as chain stores and restaurants.

“A small mom-and-pop can spend very little money on our services,” Glazer said, “while a big brand can use it and it’s still very affordable.”

Also, Back at You has started subcontracting for digital agencies and marketing firms, so he sees Reach Local and Constant Contact as potential clients rather than competitors.

“We are a great tool for a lot of other businesses, whether they bill themselves as digital ad agencies, search engine optimization firms or page managers,” he said.

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