KVVU Rewards Build Ratings, Revenue

By Arthur Greenwald
TVNEWSDAY, Mar 2 2009, 11:47 AM ET

Watch-to-win contests are the adjustable wrench of the station marketing toolkit. Not a precise promotional implement, but a reliable device to inflate ratings during a critical sweeps period.

But Meredith's KVVU in Las Vegas (DMA 42) was looking to boost ratings and sales over the long haul. So they turned to a more robust solution: the Fox5 Rewards Program. You might call it a watch to win-win-win promotion - the winners being the viewers, the advertisers and KVVU.
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Here's how it works:

Viewers earn rewards points for watching KVVU news and programming, thus building ratings. They earn still more points by patronizing advertisers who sign up as promotional partners, plus additional points each time they use a credit card that they've registered with the program (See the on-air promo by clicking here.)

Just for signing up and registering at least one credit or ATM card at Fox5Rewards.com, viewers get 500 reward points, redeemable toward prizes ranging from a Fox5 coffee mug (1,000 points), a DVD (1,600 points), a local restaurant meal (3,800 points) or a $100 gift card for a national retailer (20,600 points). For as few as 25 points, viewers can also register for sweepstakes drawings for larger "experiential" prizes, such as front-row seats at a major sporting event or a backstage meet-and-greet with the Jonas Brothers.

The latter are "prizes the average person can't buy at any price," says KVVU VP-General Manager Darrin McDonald, who keeps the promotion overhead low by procuring most prizes and fulfilling most orders in-house. McDonald estimates the cash value for each reward point "at around 2 cents."

That's apparently the winning price for wooing new business, according to General Sales Manager Todd Brown. "This is definitely opening doors that were once closed to our sales team," he says. "Thousands of businesses who don't have TV budgets can become our rewards partners and offer points to their loyal customers."

Since the program launched in late October, more than 20,000 viewers have signed up and more than 80 percent are active on a daily basis, earning points by entering the five daily "code words" displayed during KVVU newscasts. These same viewers receive an e-mail announcing each new rewards partner.

In addition to the e-mail blast, participating partners are displayed on Fox5Rewards.com and sometimes on air, where their business names can double as a code word (for an extra fee). But what they primarily receive are points, which they purchase from KVVU to bestow upon their own loyal customers to encourage repeat business.

One local success story is Sunset Cleaners, which quickly ran through its initial purchase of $5,000 worth of rewards points. The resulting jump in repeat business convinced them to quickly purchase additional points.

"This does not replace mass media," says McDonald. "This is an additional pay-per-action model that allows small businesses to target viewers when they're actually in the store or on the Web site." While the station can't yet supply individual user tracking data, rewards partners do receive regular ZIP code-specific demographic data about user response to their business.

Perhaps even more impressive is the list of national vendors available though the Web site's Online Mall, where viewers can click through to earn 2 to 10 points on every dollar spent at Wal-Mart, Priceline, Sears, Target and even such notoriously standoffish brands as Apple's iTunes Store.

Often, a single purchase results in multiple rewards. Members who pay with a credit or ATM card registered at Fox5Rewards.com, earn points from both the Web site and the vendor. In just four months, members have earned over 12 million points. (KVVU rewards are independent of any other incentives already attached to the viewer's card.) That includes more than 57,000 unique visitors, more than 1.7 million page views averaging more than four minutes per visit and more than 320,000 code words entered.

But what of the effect on news ratings? McDonald says it's too soon to tell, but nobody at KVVU thinks it's a coincidence that last November Fox5News This Morning became Las Vegas' No. 1 morning newscast for the first time. Viewers report via e-mail that they are watching earlier and more often just to catch the code words.

KVVU isn't the first Meredith station to launch a rewards program. KCTV in Kansas City (DMA 31) pioneered the program a year ago and now boasts 27,000 active members, a number its sister station in Las Vegas seems sure to surpass. Brown attributes this in part to the local casino culture. "Vegas is a reward-driven town where everyone carries reward cards. The response to our program has been phenomenal."

Meredith's duopoly in Portland, Ore. (DMA 22), KPTV (Fox) and KPDX (MNT), is set to launch PDXRewards.com this month. All three ventures are partnered with GreenLink Networks, which has developed similar promotion for stations owned by CBS, Media General and Post-Newsweek.

Eventually, KVVU plans to migrate the rewards program to mobile platforms, but that could be a few years down the line. For now, the focus is on expanding the program to as many local businesses as possible.

"We're selling rewards points and data collection in tandem with traditional advertising opportunities on air and online," says Brown, who is confident the rapid growth will continue for quite some time. "More sales equals more businesses equals more reward possibilities for viewers."