[SpamCop-List] NYTimes: Profitable fad fed by spam - 'Iraqi Most Wanted' Deck of Cards

[Jesus Casagrande]

The New York Times
June 9, 2003

E-Mail Message Blitz Creates What May Be Fastest Fad Ever
By SAUL HANSELL

LAKE FOREST, Ill., June 4 ‹ As he tapped out an e-mail message early one
Monday morning in April, Zac Brandenberg had no idea the kind of success he
would achieve. At 2:30 a.m. he pushed a button on his keyboard, sending two
million copies of the message scampering across the Internet imploring their
recipients to "Get the 'Iraqi Most Wanted' Deck of Cards!"

The Friday before, Brig. Gen. Vincent Brooks had announced that the Defense
Intelligence Agency had created a deck of playing cards with the names and
photos of 55 Iraqi leaders for distribution to border guards. The Defense
Department put the images of the cards on its Web site, spurring Mr.
Brandenberg's company, JDR Media, and many others to race to get
reproductions of the cards to market.

By 2:35 a.m., the first order came back for four decks at $5.95 each. "At
that point, I knew we would be successful and I went to bed," Mr.
Brandenberg said.

Hundreds of millions of e-mail messages about the cards have been sent
since, and some 1.5 million decks have been sold by GreatUSAflags.com, a Web
site owned by JDR, based in Los Angeles, and its partner, Lionstone
International, which is based here. Other companies have sold a total of
more than one million decks, making the Iraqi cards one of the
fastest-selling fad products in history.

Just as the Iraqi war showed off the power and speed of America's high-tech
weapons, the marketing of the Iraqi cards showed the ability of the Internet
and e-mail to promote a product with overwhelming force.

Once it was clear that the product would sell, Mr. Brandenberg dashed off
e-mail messages to his contacts at other Internet marketing companies. They,
in turn, brought in more affiliates.

In total, some 1,500 separate companies sold GreatUSA's cards online. Some
were better-known companies, like SportsLine .com, and others were tiny
operations, like WeLoveTheIraqiInformationMinister .com, an impromptu that
was site set up to chronicle the improbable bravado of former Iraqi
Information Minister Muhammad Said al-Sahhaf. Since GreatUSA paid these
companies only if they made sales, it had enormous reach with almost no
marketing expenditure.

"It is mind-blowing, when you sit back and think that in the course of the
month you could sell one million decks of cards without planning to do so,"
said Edward Jack, a partner in Lionstone. "Without e-mail, this would never
have happened."

The Iraqi cards certainly were not the biggest fad to hit the country, but
they may well have been the fastest. In the summer of 1957, Wham-O sold 25
million Hula Hoops, but it had to spend all spring introducing them on
playgrounds around the country. In 1976, an ad man named Gary Dahl sold 1.5
million pet rocks, but that took six months.

"This fad was related to a war that was going to be so short that it would
be difficult for a Target or a Kmart to buy the product and get it into
2,000 stores before the war was over," said Dan Head, the vice president for
e-commerce at SportsLine, which sold the GreatUSA cards on its site and by
e-mail.

The Iraqi card frenzy shows the dark side of e-mail marketing as well.
During the peak period, countless e-mail accounts were getting a dozen
offers a day for the decks. Much of that was spam ‹ mail sent to people who
had not asked to get e-mail marketing.

Indeed, Brightmail, a company that blocks spam for Microsoft's Hotmail,
EarthLink and others, has identified 73 different variations of the Iraqi
card pitch from various companies and has caught 26.5 million individual
Iraqi card messages that it defines as spam.

After the e-mail blizzard reached full force, Mr. Brandenberg sent a
scolding e-mail message to all of GreatUSA's sales agents. It reminded them
to send solicitations only to people who agreed to be on marketing lists.

"I compared it to kindergarten," Mr. Brandenberg said. "We are all having a
great time, so don't ruin it for the entire class." Such entreaties were not
enough, though, and he cut off several affiliates for egregious spamming, he
said.

The power of e-mail marketing today ‹ and the reason that spam is so hard to
control ‹ is that the marketing is not centralized, but conducted by a
complex web of product makers, mailing list owners, marketers and brokers,
all of whom are disseminating the sales pitch.

For example, one of the first companies that Mr. Brandenberg contacted was
AzoogleAds in Toronto. GreatUSA agreed to pay AzoogleAds 30 percent of any
order it could generate for the cards. AzoogleAds, in turn, took the design
for GreatUSA's e-mail offer and placed it on a Web site available to 700
independent companies that are its affiliates. Any of them could download
the e-mail message and send it to mailing lists they controlled. They could
also place banner ads selling the cards on their Web sites. AzoogleAds
promised to pay these affiliates $6 for each order received, figuring that
the average order would be for several decks.

One of those affiliates was Abacus Enterprises, which Laura Belzer runs from
her home outside San Francisco. Ms. Belzer quickly relayed the Iraqi card
promotion to a partner who has a list of 25 million e-mail names, mostly
users of Hotmail. She agreed to split the commission from AzoogleAds with
him.

As it turned out, the Iraqi cards proved an amazing success for them. Of the
25 million messages sent, they received 3,164 orders ‹ a response rate of
just over one-tenth of 1 percent. That would be tiny for a marketing
campaign done by regular postal mailing, but it is four times what Ms.
Belzer receives promoting other products like printer ink by e-mail.

The financial results were even better. On the best days, the cards
generated commissions of $5,000 to $6,000 for every one million e-mail
messages sent. The printer ink promotions generate only $500 to $1,200 per
million messages. Since her costs are quite low, Ms. Belzer says she can
make a profit on only $200 in sales for each one million e-mail messages
sent.

The flood of response to the Iraqi cards offer brought its own tensions.
While JDR was gleefully orchestrating the sale of tens of thousands of decks
a day, panic was rising at Lionstone, the half of the partnership that was
supposed to secure the cards and handle the customer service and shipping.

Lionstone is primarily a liquor importer with 100 employees that runs Beer
Across America, a sort of brew-of-the-month club, and other mail-order
services for wine, cigars and coffee. JDR is a nine-person e-mail marketing
company that has helped Lionstone sell wine clubs online.

Both had been looking for new markets, and in March, they formed what they
thought would be a small venture to sell patriotic goods at
GreatUSAflags.com. The Web site opened for business on April 10, the day
before General Brooks announced the Iraqi card deck.

Once the general made his announcement, Louis Amoroso, a partner in
Lionstone, started searching the Internet for companies that make playing
cards. By Sunday morning, April 13, he had reached Mohammed Kamal, the owner
of Liberty Playing Cards, a small Texas company that was already preparing
to print replicas of the Iraqi deck. That company had already started
selling the cards on eBay and on its own Web site.

But the arrangement ran into trouble right away. When the Defense Department
created its deck, it used the image of a joker from a deck of Hoyle brand
cards, a trademark of the United States Playing Card Company, the largest
card maker in the United States. That company spent much of the first week
after the Defense Department announcement sending "cease and desist" letters
to anyone printing cards with its joker image. At the same time, it was
trying to figure out whether or how to get into the Iraqi cards business
itself.

By Thursday, April 17, Mr. Amoroso was frantic that he had sold 200,000
decks he might not be able to deliver. And new orders were coming in at a
pace of 40 a minute, and dozens of competitors were appearing. He finally
reached executives of United States Playing Card in their 100-year-old
factory in Cincinnati. By this point, he needed 500,000 decks. The card
company was wary of selling them to a company it did not know. Mr. Amoroso
sealed the deal by wiring the card maker a hastily borrowed $500,000 that
afternoon. In return, he got exclusive rights to use the official joker in
the Iraqi deck.

It was not until the following week that two giant trucks pulled up to
Lionstone's cement and brick building here. By then, employees were working
round the clock, sleeping on cots, fielding customer calls and dealing with
other issues. Nearly all of Lionstone's 100 employees, plus another 80
temporary workers, spent that weekend putting decks of cards into envelopes.

Things have calmed down in recent weeks. GreatUSA's Internet orders are down
to only 2,000 a day. But it has also sold 750,000 decks to retail stores
like Walgreen's. Its other online merchandise is doing well. It has sold
25,000 red, white and blue plastic foam car antenna balls.

Now the company will see whether its list of 400,000 customers who brought
Iraqi cards can be enticed to buy other products. Soon an e-mail offer of
boxer shorts with flags on them will be sent to those customers just in time
for Fathers' Day.

 



http://www.nytimes.com/2003/06/09/technology/09CARD.html