SBJ/June 12 - 18, 2000/E Sports
Web company striking deals with universities to share wealth
Published June 12, 2000
The college Web market is large and lively, but sometimes that's the rub.
Mrgoodbucks.com is signing up universities and colleges in an arrangement that makes the school sites an affiliate with online retailers. A portion, up to 15 percent, of every purchase goes to the school of the shopper's choice, while mrgoodbucks.com earns a royalty.
There's a lot of potential here, given the strong feelings alumni have for their schools. But some feel it's hard to get these people to embrace the concept of donating to their school while surfing and shopping online. And there's the matter of reaching these people with the message in the first place.
The folks at mrgoodbucks.com are bullish on the idea, however. They've signed up 40 universities so far, including Michigan, Notre Dame, Arizona State and Florida State, and recently added the California Community College Commission on Athletics, 108 schools in all. More deals are in the works, according to President Doug Easter, that could bring hundreds more small and medium-size schools.
The site launched in January, and the company is still calculating first-quarter revenue and royalties, but Easter is more concerned with building a network of schools and retailers, the latter now numbering more than 150.
Mrgoodbucks.com has found that making deals with major universities can be a lot of work. "The big schools are a long process, because you have rights holders and different companies providing content to their Web sites, and a lot of people at the table when you have a meeting," Easter said. "It's been bearing fruit lately, but we see a lot of potential in the Division II and III, too."
In the lower divisions of the NCAA, the angle is a little different. Instead of tapping into alums who might want to support the athletic department, they're aiming at current athletes, such as the 30,000 in the California community colleges. The athletes and their supporters are encouraged to drive people to the school site or to mrgoodbucks.com to generate much-needed funds for bats and balls. It's the traditional car-wash idea brought online.
But there are challenges. "As any college marketer knows well, it's hard to develop a good marketing program at the grassroots level; it can be very expensive," said Jeff Cravens, vice president and general manager of the FansOnly Network (fansonly.com), which handles the Web production and marketing for 68 NCAA schools. Cravens says this despite the fact that 45 of those schools are working with greatergood.com, a mrgoodbucks.com competitor that also sends up to 15 percent of purchases to schools, in a deal Cravens worked out last year. FansOnly splits revenue from greatergood.com with the universities it represents.
"It's a challenging business model overall," Cravens said. "We never viewed it as a huge revenue source for the schools, as my belief is our sites are content-oriented and we're not sure people go there to shop, especially for non-affinity-based items."
The marketers at mrgoodbucks.com don't agree. They argue that it only makes sense to piggyback with the growth in e-commerce, and that it's a matter of acclimating fans to combine their shopping with their interaction with the university site in a way that benefits the school. That's why they've recently hired marketing staffers to visit member schools and teach athletic directors how to spread the gospel.
Easter said: "We've built a critical mass with the number of sites we have, and now we have marketing kits and staffers that we are sending to each school. They need to learn how to be proactive and, and we ourselves are willing to do anything.
"I mean, we have a dog suit and posters and fliers to get the name out there. It's an education process."
Cravens doesn't disagree with this philosophy, and he said it makes more sense in the small-school context, where there is more room on Web sites for promotion of these programs, and where the athletes and administrators may be more motivated to promote. "For us, this was a component that is available and should be taken advantage of," he said, "but we're not pinning hopes on it having a huge effect on our bottom line."
Noah Liberman may be reached at email@example.com.