You may not know what “FiOS” stands for, but communications provider Verizon is running an online promotion that should take care of that. They dearly hope so, because FiOS is an important key to the company’s future.

The acronym refers to Verizon’s “Fiber Operating System”, the fiber-optic network the carrier is building that allows it to bundle television and high-speed Internet services with digital phone services. The service lets Verizon compete with cable companies’ bundled offerings, and Verizon is so far the first large U.S. carrier to sell it.

By most accounts, the service has been seeing good takeup where it’s available. Verizon’s 1Q 2008 financial report said it now has 1.2 million TV subscribers and 1.8 million customers for its broadband service. (Not all areas served can get all three features due to existing franchise agreements.)

But as the carrier brings FiOS to new markets, it has been compelled to move beyond the early-stage strategies for making customers aware of the service. Traditionally, getting the word out has involved door-to-door marketing such as door hangers and traditional local media such as outdoor ads. As its FiOS service area grows larger, those methods grow more inefficient.

So in early March Verizon and agency Promotions.com rolled out the “Verizon Lounge”, an online living room where customers can come to get informed and excited about the capabilities of FiOS and check its availability in their market. And to induce them to register for updates—and to give them a reason to keep coming back often—the pair linked the site to a set of daily and weekly prize giveaways, and to a sweepstakes for a large-scale $25,000 home entertainment makeover, to be held at the end of this month.

Visitors to www.verizon.com/verizonlounge find themselves sitting on a couch with a typical FiOS family. They can pan to the left and learn more about FiOS voice service or to the right and bone up on the kind of download speeds they can get with FiOS Internet– up to 7 megabits per second (Mbps) over standard digital subscriber line, with amped-up premium services of 50 Mbps available in some locations.

But the dead-square center of the site is a wall-mounted TV screen that directs them to register for the sweepstakes. Once registered, visitors can play an instant-win match-three game. They are also entered to win one of a changing menu of weekly prizes, many of them related to entertainment options available through FiOS TV.

“As a weekly prize, we’ve given away a backstage experience at a taping of ‘The Daily Show’ on Comedy Central,” says Ryan Hill, senior manager for online national marketing with Verizon. “Other prizes have included sending folks to a private taping of ‘Idol Tonight’, a TV Guide show that covers ‘American Idol’. Weekly prizes like that connote our entertainment exclusivity.”

In April Verizon filed an application to market FiOS service to the 3.1 million homes in the New York video franchise area and expects to begin marketing there later this year. So one of the weekly prizes in that local market was a set of tickets to the subway series between the Yankees and the Mets this month.

Other weekly prizes feature Xbox 360 consoles and free videogames, raising awareness of the added value FiOS service can bring to interconnected gaming over the Web.

Beyond getting interested consumers to raise their hands and opt in to receive e-mail about FiOS service, Verizon is using the online promotion to reinforce its branding as a new entertainment medium, now that it’s selling video service.

“Entertainment is now a big part of the business, and part of our job as marketers is to communicate that we’re not your father’s telecom anymore—we’re an entertainment company,” says Hill. “The site is meant to show that there are entertainment things Verizon can bring to you that you can’t get anywhere else.” For example, the basic TV package from Verizon FiOS includes the NFL Channel which offers exclusive broadcasts of a number of NFL games during the season.

Visitors can also see short clips from FiOS video offerings—either broadcast shows or movie trailers—after game play, further reinforcing the entertainment connection.

Hill says that Verizon is impressed with the raw game play numbers from the “Verizon Lounge” promotion: more than 300,000 plays as of mid-April, less than six weeks after the launch. And since at that time the average registered visitor was playing the game about six times, chances are good that the tiered structure of daily/weekly/campaign-long games was having its intended effect on repeat visits.

Agency Promotions.com has provided a dashboard that lets Verizon dive deeper into visitor behavior both on the site and through it, so the carrier is able to tell where they go when they leave the site. Hill says a strong proportion of those departures are headed for the main Verizon site where visitors can get more detailed information about features and pricing of the Verizon FiOS services.

“We’re very pleased with the metrics so far,” he says. “This is the first time we’ve done a branding promotion like this. In the past, our Web site has been very transactional by design. So seeing a lot of return traffic from our folks to this new effort is very encouraging.”

Since the promotion is partly, and perhaps mostly, aimed at increasing awareness of its FiOS product, Hill says Verizon was careful not to burden the campaign with too much ROI baggage.

“We were intentionally not looking to judge success by whether the campaign drove x number of sales,” he says. “We know we’re getting a lot of impressions. But they’re not media impressions, they’re valuable ones that involve engaged exposure to the site and multiple exposures to the brand. Given where we’re going with the entertainment industry, that engagement is really what we wanted.”