Laughing All the Way to the Bank

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Did you hear the one about the Italian online marketing company that started out as a joke? Well, here's the punchline: That company, Buongiorno, has become an European leader in bringing direct-mail techniques to e-mail.

Although Buongiorno (www.buongiorno.com) was officially launched in February 2000, its antecedents go back to 1995. That's when former Andersen consultant Mauro Del Rio began to think that e-mail, not the Internet, provided the best means of making money in the then-burgeoning New Economy. "He saw that it had a wider audience in terms of reach," says Lucia Predolin, marketing and communications director. To prove his point, he started e-mailing friends—and eventually friends of friends—a daily joke-of-the-day newsletter. In the meantime, he worked on a business plan and helped devise a platform capable of sending 250 million e-mails a month. After three-and-a-half years, Del Rio's daily joke letter had 70,000 subscribers and advertisers began to see that it was a serious marketing tool.

Del Rio quit Anderson in 1999 to work fulltime on Buongiorno, which means "good morning." Today, the company has 140 employees, 18 million subscribers and sends out nearly 400 different newsletters a day in six countries. In Italy, Spain and Austria it uses the Buongiorno brand; in Britain, France and Germany it goes under the name, Messagizer. No one receives unsolicited e-mails and the newsletters go to subscribers only. Newsletter subjects range from sports to finance, cooking to soap operas, fashion to entertainment. While the overall concepts don't change much, editors in each country ensure that content is locally oriented.

It seems to work. Predolin says that subscribers tend to be very loyal. "There is very little churn," she says. To build up its reader base, Buongiorno uses a variety of methods, including online promotions, virtual ads, online surveys and co-branding with popular websites, like Yahoo! and Lycos. It also relies on the old-fashioned "friends telling friends," Predolin says. Buongiorno shuns the banners ads seen on many websites, opting instead for a low-key approach. Most ads include a logo and three to four lines of copy. It has partnered with Italian research company Eurisko to build a database of subscriber profiles. So if an advertiser wants to reach young, male car-owners, or middle-aged female professionals, it knows which newsletters will best target those audiences. And it's attracted a lengthy list of high-profile advertisers, including McDonald's, Coca-Cola, Procter & Gamble and Unilever. Another source of revenue is consulting, helping companies to use e-mail to "build strong customer relations." Consulting clients include Xerox, Stream TV and the Italian government.

Buongiorno's revenues last year totalled about $7.9 million from advertising and $660,900 from consulting. And the company expects to realize its first profits in about two years. Meanwhile, it wants to continue to expand throughout Europe, and is anticipating a surge in wireless subscribers. And, oh yes, Buongiorno still publishes a daily joke newsletter. Nothing funny about that.