E-Greetings A Source Of Holiday Joy

Last year, digital marketing firm Acquity Group sent out the usual thousand or so greeting cards.

This year, the light bulb went on, says Matt Schmeltz, the firm's vice president for marketing and vendor alliances. Instead of traditional greeting cards, the company switched to e-cards.

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"We try to push (client) companies to disseminate their brand more effectively online. For us to send an offline mailer seemed disconnected from who we are," Schmeltz said.

So, Acquity sent an e-card to about 30,000 customers, vendors and prospects. When opened, it plays soft jazz in the background while delivering different messages from each of the privately owned firm's various offices.

Using e-cards was greener and cheaper, Schmeltz says. But more than that, he says it turned into "a compelling lead-generation piece. Recipients called up and asked, 'Did you guys do that internally? It's great. Maybe we should do something like that next year.' "

OfficeMax Elves

E-cards seem to have been gaining fans, though statistics are hard to come by. One company that has gotten a lot of mileage out of its holiday greeting is OfficeMax. (OMX)

In 2006, the company created ElfYourself.com, an animated Web site that not only greets visitors but also lets them create an animated e-card, using photos of anyone, looking like elves, doing one of four dances.

Users can easily e-mail their e-cards or post them on their blogs. The site is powered by digital entertainment firm JibJab.

In 2007, ElfYourself received more than 193 million site visits from Nov. 21 to Jan. 2, OfficeMax says. More people visited ElfYourself.com than visited Facebook.com in that span, according to Web tracker Quantcast.

"It's become a holiday legend," said William Bonner, senior director of external relations for OfficeMax. Bonner was in a gleeful mood this day, a Friday, after getting some play for ElfYourself on ABC's "Good Morning America."

OfficeMax has expanded the capacity of the site and expects more visits this season than last.

The company can't directly attribute any sales to ElfYourself, but Bonner says that 30% of users surveyed by the company said the site made them more likely to shop at OfficeMax.

The Greeting Card Association, a 300-company trade group, estimates that 2.1 billion holiday cards will be sent this year in the U.S. alone and says some 500 million electronic greeting cards will be sent worldwide. But it doesn't have direct comparison figures, which the group's spokeswoman, Barbara Miller, says are difficult to get, in part because so many e-cards are forwarded to multiple recipients. Still, paper remains king.

"The number of e-cards is rising," Miller said, "but most people are not substituting e-cards for paper cards."

Privately held Hallmark Cards, based in Kansas City, Mo., estimates that one e-card is sent for every 20 of its paper cards. Its Business Expressions unit doesn't even offer e-cards, says Sarah Kolell, a company spokeswoman.

MSN And American Greetings

But e-card use appears to be rising. Microsoft's (MSFT) digital advertising solutions unit researched online trends among women. Of the women it surveyed, 26% said they had eliminated or drastically reduced their use of paper cards, turning instead to e-cards.

Microsoft, which partners with American Greetings, (AM) the nation's No. 2 greeting card company, to sell e-cards on MSN.com, has been searching for ways to expand the business, says Seth Dallaire, Microsoft's central region director of sales. "We think that if 26% of women are highly engaged in this segment of the digital space, that this is a trend that we should be paying attention to," he said.

American Greetings and Hallmark are the Nos. 1 and 2 U.S. e-card companies, just as they are with paper cards.

But it's tough times for this industry, like so many. On Dec. 9, American Greetings said it would cut 275 jobs mostly in its Cleveland headquarters, in part because of goodwill asset impairment charges it would be taking at its AG Interactive online unit, responsible for most of its e-cards.

On Tuesday, the company reported a per-share loss from continuing operations of $4.25 a share for its fiscal third quarter ended Nov. 28, vs. a loss of 52 cents in the year-ago quarter. It took impairment charges of $242.9 million, or $4.46 a share, for its AG and one other unit. But the AG unit outperformed on sales. Its revenue rose 9.3% to $20.7 million, and overall sales fell 6.5% to $454.1 million.

Not only do consumers and businesses like e-cards — spammers do too. And that introduces a Scrooge-like dilemma into the trend.

Anti-virus software maker Symantec (SYMC) says e-card spam has fallen since 2007 but remains a problem. And the FBI warns of a recent flurry of fraudulent e-cards that appear to be from familiar sources but ask for personal information. The bureau in a recent statement advised: "Delete questionable cards without opening."

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BY JENNIE L. PHIPPS

Source：Investor's Business Daily