InformationWeek: The Business Value of Technology

Be Free made its mark on the Internet with technology that helps businesses determine how successful their affiliate marketing ads really are, letting them pay by the number of hits they generate. The vendor is now focusing on a different kind of marketing. A new product, BSelect, collects customer browsing and buying data, analyzes it, then uses it to show Web visitors content and products they've expressed interest in or are likely to buy.

Users of BSelect say the software forms data models based on a user's behavior over time, rather than on a single product purchased or hyperlink clicked. Even subtle personalization can alter a customer's behavior.

Supergo.com, a cycling retailer in Santa Monica, Calif., is using BSelect to personalize suggestions on its Web site. If a customer clicks on a bicycle fork, for example, the site may recommend brakes bought by other customers who liked the fork.

When the suggestions are static, the site's click-through rate is less than 3%. With personalization, it jumps to almost 7%. "If you're sensitive to the rules of personalization, the effect can be remarkable," says Steven Laff, the consultant who designed and produced Supergo.com's Web site.

While Be Free counts some of the Internet's most prominent businesses among its customers, analysts say Internet companies are tiring of conventional Web advertising, which often resembles a pyramid scheme--plenty of money flows among businesses, but little of it comes from customers. Dot-coms need to focus on more than the number of people viewing an ad, says Lynn Harvey, an analyst at the Patricia Seybold Group. "Affiliate marketing programs need to have a much deeper understanding of their clients' customers," she says. "It takes more than stickiness to make your company run."

Harvey says Be Free may distinguish itself from other personalization vendors by virtue of the large affiliate network it already claims. Businesses could draw conclusions not only from their own customers' behavior, but from everyone in Be Free's network, giving them a more rounded view of the customer. "Be Free's strength comes in breadth," she says.