Experian Swears Off Incentive Marketing, Lays Off 50

Consumer data giant Experian is closing the book on its Web-based incentive marketing activities, laying off 50 in its MetaReward unit and eliminating all incentive and loyalty programs.

Spokesperson Heather Greer said the move was motivated by diminishing returns in the subsidiary.

“The incentive marketing space originally attracted high volumes of consumer traffic, which provided an opportunity for us to offer advertising and marketing services to clients,” she said. “Over the past year, the effectiveness of incentive marketing has eroded and volumes have dropped. We decided the best move for us would be to exit the incentive marketing space.”

Earlier this week, the company told partners it would shut down a Web site for its MetaReward programs and lay off 50 employees, or about two thirds of that staff.

The shuttered programs made up about 90 percent of MetaReward sales, according to Greer. The remaining 10 percent is in credit card marketing and membership clubs.

She said the drastic reduction in the MetaReward program would have no implications for other of the company’s interactive businesses, which include LowerMyBills.com and PriceGrabber.com. The company purchased the former in May of 2005 for $380 million and the latter in December of last year for $485 million.

Experian acquired MetaReward two years ago.

Among the staff being retained are a core group of engineers focused on developing new solutions and some people in its credit card marketing business. Greer said the company would help place laid off workers in new jobs, both internally and externally.

Another incentive/loyalty marketing play, MyPoints, was recently sold by its parent United Airlines (UAL) to United Online for $56 million. UAL originally paid $116 million for the business, and the drop in price supports Experian’s contention that incentive marketing is a shrinking business.