Credit card executives are divided over whether the Internet is their next best marketing vehicle.

Some welcome the Net as a low-cost advertising alternative to ever- larger and increasingly less-effective mass mailings. Others see only an amorphous mass of hackers and students from whom they would prefer not to get applications.

At MBNA Corp., for example, zeal about a potential low-cost marketing bonanza has been tempered by mediocre on-line customer acquisitions. Only one out of five such applications is accepted, the company said.

"Thus far, the quality of the Internet applicant is not as good as from other marketing channels," said Brian Dalphon, senior executive vice president of MBNA in Wilmington, Del. "It is relatively new, so we're proceeding cautiously to make sure we're getting the right type of customers."

He said the typical MBNA customer earns at least $60,000 a year and has a 14-year history of timely payments. Internet applicants tend to have less-desirable profiles. MBNA signed up eight million new customers in the first nine months of this year; Mr. Dalphon would not say how many were the result of on-line marketing.

"The Internet has some potential in the future, but it's limited right now," he said.

According to Intermedia Advertising Solutions in New York, credit cards were the 10th-largest Internet advertising category in the first quarter, at $2.8 million.

Extrapolated numbers from a recent poll of 1,200 people by Brittain Associates Inc. of Atlanta indicated that nearly seven million credit card accounts were opened because of on-line advertising.

Brittain said 51 million adults in the United States use the Internet regularly, and 15 million of them have searched there for a card or home loan. Three quarters of those searching for a credit card applied on-line. By comparison, only one-third of mortgage or home equity seekers followed through with an application.

"The routine Internet users tend to be a little more affluent," said Bruce Brittain, president of the research firm. "But those who find their card on the Internet tend to be a little less affluent and younger."

Some card issuers find these demographics appealing and have plunged in with splashy advertising and cobranding deals.

First USA, a Bank One Corp. unit and aggressive Internet marketer, issues cobranded cards with two of the top on-line portals, America Online and Yahoo. First USA also has exclusive rights to market cards on the Excite search engine.

Last week, First USA announced a five-year, $90 million advertising agreement with Microsoft Corp. and its MSN on-line network.

"First USA is buying a presence on the Internet in a big way and making a statement," said Steven J. Smith, president of S.J. Smith & Associates, Scarsdale, N.Y. "I can see a lot of justification for the $90 million because of the growing reach of the Internet."

These alliances have helped First USA reach people who might not be receptive to direct mail or telemarketing, the company said.

"Each card appeals to a little different group," said a First USA spokesman. The company's on-line partners "are competitors within the cobranding industry, but they have constituents who are loyal to them."

Mr. Brittain said First USA has signed up three times as many customers on-line as the No. 2 in that category, MBNA. He would not give specific numbers.

Other issuers named in Brittain's survey included BankAmerica Corp., Capital One Financial Corp., Chase Manhattan Corp., Citigroup, and Heritage Bank of Commerce in Santa Clara, Calif., which issues the NextCard Visa.

To get in on the action, Fleet Financial Group's credit card division in Horsham, Pa., recently signed a $22.5 million deal with Lycos Network for a cobranded card and rights to advertise exclusively on the Lycos Web site.

Scott Smith, an electronic commerce analyst at Current Analysis in Sterling, Va., said search engines like Lycos are "the most prime real estate on-line."

MBNA advertises on 500 of the 4,500 Web sites hosted by its affinity groups, but considers the Internet "a relatively small marketing channel," Mr. Dalphon said. The company recently added some Web sites to its affinity collection, like womenconnect.com and earthlink.com.

Mark Esiri, chief executive officer of an electronic commerce consulting firm called Cyber Dialogue Inc., said MBNA's deal with the women-oriented site shows how useful the Internet can be in reaching specific groups.

"Through the mail, it is very difficult to target women directly," he said. "Males are always listed as heads of households."

"The Internet is not a direct-response medium, which is what the credit card issuers are used to," Mr. Esiri said. "It's an interactive medium" and may require some executive retraining.

Visa U.S.A., meanwhile, is starting to advertise its on-line partnerships on television. The first commercial, spotlighting eToys, is meant to show the ease of on-line shopping and to depict Visa as an e- commerce leader.

Complementary print ads debuted this week in USA Today, The Wall Street Journal, and The New York Times.

Visa has also teamed with PointCast Inc., a personalized news and information service, to create MarketPlace, an on-line store for business- related products and services.

Analysts said credit card advertisers have to prevent their brands from being sullied by some of the suspect card offers floating around cyberspace. Unsolicited credit offers from no-name firms are common in people's e-mail.

"If you have some sort of cheap secured card advertising out there, splashing ads everywhere, it tends to affect people's perceptions of the marketplace," said Mr. Smith of Current Analysis. "The worst tenants could bring down the whole atmosphere."

First USA is trying to avoid that by allying with top names. "If Excite and Yahoo and AOL are your trusted navigators on the Internet and they are all willing to get in bed with this particular company, is that somebody who is going to be risky?" said Lee A. Spirer, principal at Booz-Allen & Hamilton Inc. in New York.

To be sure, there are still technical bugs to be worked out. A message on a First USA Web site says: "Due to overwhelming response to the AOL Platinum Visa, we are no longer able to accept your questions and comments via e-mail. Please direct your questions to our toll-free number."

Coming Friday: Two companies that help card issuers get on-line.

Citibank has become an advertising sponsor of the OnHealth Network Co. Web site, www.onhealth.com, which provides news coverage and other health- related information.

The Seattle-based site hosts on-line discussions, direct access to experts, interactive tools, and search capabilities for people interested in specific health-related topics.

"This partnership demonstrates Citibank's confidence in our ability to reach a broad cross-section of the Internet market," said Robert Goodman, president of OnHealth Network Co. "Citibank is endorsing the site's credible and reliable content, while appealing to the growing audience of women on-line."

Other OnHealth advertisers include Procter & Gamble, Claritin, Dr. Scholl's, and Cancer Treatment Centers of America.

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