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Interactive Marketing Firms Power Ahead, Plan Growth
By Ed Duggan
South Florida Business Journal (February 29, 2008 - March 6, 2008)
Interactive marketing's impressive results are driving the huge increase in the money being spent in the industry, experts say. "The numbers are the numbers", said David Clarke, founder of Miami-based interactive marketing firm BGT Partners. "In the early Internet days, the numbers used to be poor. But today, they are spectacular."
The 2007 estimated interactive advertising "spend" in the U.S. was estimated at $22.5 billion, exploding to $62.4 billion in the next five years, according to Princeton, N.J.-based Kelsey Group's Annual Forecast for 2007 to 2012: Outlook for Directional and Interactive Advertising.
The report forecasts that global interactive ad revenue will reach $147 billion by 2012, up from an estimated $45 billion last year. The reason for that 22.6 percent compound growth rate in the U.S., according to industry participants, is results.
"Today, everything in online marketing is tracked, analyzed and yields immediate results," Clarke said, nothing that it's a far cry from 1996, when his firm started. "Then, the numbers weren't good and all we had was a hope that it would someday work out. Today, it all does."
Its local clients include Steiner Leisure (NASDAQ: STNR), Bank Atlantic Bancorp (NYSE: BBX), Ryder System (NYSE: R), and Terremark Worldwide (NASDAQ: TRMK).
The shift to digital advertising has sparked the startup and growth of a wide variety of firms.
Tim Keyes is CEO of Fort Lauderdale-based Runaware, which was founded in late 1999 and employs 38 in Florida, Sweden and England. His company allows an online test-drive of current software and captures leads for his software clients, which include Microsoft, Front Range, Corel, Intuit and Sage.
"It's soft sell," Keyes said. "We act almost like a personal shopper helping the client find what's best for him or her." Runaware, which has revenue of $3 million, has hit break-even, and has a revenue target of $5 million in 2008.
Because of it's origins, the company has 300 owners in Sweden and recently become a public company there.
Utilizing Citrix Systems' platform technology to deliver its demos worldwide, Runaware executives said they eventually want to be an application service provider - where the software is housed on its servers and its clients would pay a user charge as they access it over the Internet.
"We want to be the one-stop shop for online software," Keyes said.
Interactive marketing comes in various forms.
Boca Raton-based Vayan specializes in monetizing Web sites - turning user databases into customers via opt-in e-mail marketing.
Any company using e-mails is concerned with its content, technology and compliance issues and Vayan consistently stays on industry white lists, with less than 1/10th of 1 percent complaints.
The company hit revenue of "just under $20 million," according to Vayan COO Jesse LoRé. "We look to grow at 35 to 40 percent this year, into the $25 million to $28 million range."
Clients, which include Kraft Foods, Accudata, Anchor Computer, Boca Java, Latin Pak and Ward Media, pay specified amounts for each lead or acquisition.
The 50-employee firm's profit grew at 100 percent a year before 2007. Last year, LoRé said, profit was up "just" 80 percent, while he notes the current year is shaping up as one of opportunity - and Vayan plans to add six to eight new employees.
"If everything comes into place, we could add north of 10 [more employees]," LoRé said.
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