Ikea has canceled a popular on-line marketing campaign because consumers said they were worried it would put people on an Ikea mailing list without their permission.
The hip Swedish home furnishings retailer was offering shoppers as much as $75 off their purchases to send their friends Internet postcards announcing the April 12 opening of its Emeryville, Calif., store. About 10 site visitors e-mailed Ikea saying they were concerned that postcard recipients would be placed on Ikea mailing lists without their permission, and Ikea pulled the promotion.
“We had some really good response to it, but we also had a few people begin to tell us that what we were doing was associated with spamming,” said Rich D’Amico, manager of new business development for Ikea.
It’s one more sign that consumers are growing increasingly concerned about their privacy on the Internet and that companies–even if they’re not breaching privacy–are making sure they are not seen as marketing-data vultures. Even before it pulled the promotion, Ikea said it never planned to send marketing material to either postcard senders or recipients, and had promised not to sell the marketing data.
“That sounds to me like a little bit of an overreaction, but again that shows the level of sensitivity that the privacy issue is coming to,” said Jim Nails, a senior analyst with Forrester Research in Cambridge, Mass.
“It does appear that the privacy bomb has exploded,” he said.
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The cancellation is especially surprising considering the promotion’s potential for success. More than 37,000 people had sent or received postcards since the promotion launched at the beginning of March. Called “viral marketing,” experts say it is cheap and effective.
It is one of few models where the advertiser pays only for the customers who buy something from the store.
Retailers usually have to spend big bucks just to identify target customers and notify them of a promotion, but in this model the company spends virtually nothing on that. An added advantage is that the ad comes from a friend, which gives it more credibility.
“That, I think, is promotion at its best,” said A. Cemal Ekin, who is a teacher of Internet marketing at Providence College in Providence, R.I.
Word-of-mouth advertising has been around for ages–Ikea got its idea from the postcards restaurants keep in their foyers for customers to mail to their friends–but the growth of the Internet has made it even more effective. And before Ikea’s cancellation, it seemed as if it were going to be a hot marketing technique.