The Internet has emerged as an attractive new medium for advertisers due to its significant growth in number of users, volume of e-commerce transactions, and unique characteristics of the Internet as compared with other advertising media. As a result, Internet advertising and e-commerce transactions have grown rapidly in recent years. Forrester Research estimates that in 1998, $1.5 billion was spent on Internet advertising, and projects that this amount will grow to $17.2 billion by 2003. Additionally, the Yankee Group expects that e-commerce transactions will increase from $25 billion in 1998 to $699 billion in 2002.
Internet advertisers, primarily direct marketing and e-commerce based companies, are increasingly seeking performance-based alternatives to the CPM model. Performance-based advertising is intended to generate a direct response from a consumer and is designed to maximize the number of responses per advertising dollar. Performance-based advertisers focus on the immediate advantages of advertising. Forrester Research projects that performance-based advertising models will account for 50% of online advertising budgets by 2003, up from 15% in 1999.
The Internet is particularly well suited for performance-based advertising. Reading and clicking on a Web advertisement is easier and more convenient for many consumers than traditional direct response advertising mechanisms such as toll-free numbers or business reply cards. Web advertisements also allow consumers to respond immediately to advertising and interact directly with the advertiser in real-time. A key element in performance-based advertising is the ability to measure response rates in real time, enabling advertisers to use this feedback to rapidly modify their advertising campaigns.
As a pioneer of the performance-based advertising model, known as cost-per-click or CPC, ValueClick provides a cost-effective solution for attracting targeted, high quality customers. This solution also provides Web publishers with an opportunity to generate advertising revenue. The appeal to publishers of high-traffic Web sites is the ability to capture additional revenue from their unsold advertising inventory. As the leading aggregator of small- to medium-sized Web sites, ValueClick provides advertisers, primarily direct marketing and e-commerce companies, a cost-effective, low-risk Internet advertising solution. The ValueClick Network is comprised of more than 20,000 Web sites that offer innovative advertising solutions on name-brand properties in high demand content channels. According to Media Metrix, ValueClick reaches over 30% of the U.S. Internet population and delivers over 40 million ads daily. With a proven track record of providing consistent value to its partners, ValueClick is among the e-commerce community's leading advertising networks.
ValueClick is the leading provider of Internet advertising solutions for publishers of Web sites and online advertisers.
As a pioneer of the performance-based advertising model, known as cost-per-click or CPC, ValueClick provides a cost-effective solution for attracting targeted, high quality customers. This solution also provides Web publishers with an opportunity to generate advertising revenue. The appeal to publishers of high-traffic Web sites is the ability to capture additional revenue from their unsold advertising inventory. As the leading aggregator of small- to medium-sized Web sites, ValueClick provides advertisers, primarily direct marketing and e-commerce companies, a cost-effective, low-risk Internet advertising solution. The ValueClick Network is comprised of more than 20,000 Web sites that offer innovative advertising solutions on name-brand properties in high demand content channels. According to Media Metrix, ValueClick reaches over 30% of the U.S. Internet population and delivers over 40 million ads daily. With a proven track record of providing consistent value to its partners, ValueClick is among the e-commerce community's leading advertising networks.
ValueClick, Inc, the world's leading provider of performance-based online advertising solutions, today announced that it has acquired onResponse.com, a leading online affiliate advertising firm. onResponse.com conducts customized cost-per-lead and cost-per-acquisition campaigns on behalf of advertising and direct marketing clients, while also providing new revenue-generating opportunities to over 8,000 website publishers.
The acquisition allows ValueClick to offer to its advertisers additional opportunities for cost-effective customer acquisition, and its publishers yet another way to generate revenue. onResponse will be able to significantly expand the solutions they offer to both their advertisers and the over 8,000 website publishers who turn to them for ways to improve the monetization of their properties.
ValueClick, Inc., the world's leading provider of performance-based online advertising solutions, today announced the acquisition of Click Agents.com, Inc., another leading provider of performance-based online advertising solutions. The merger of the two organizations considerably extends ValueClick's dominance in the pay-for-results advertising space, the fastest growing segment of the online advertising industry.
As part of the deal, Click Agents will receive 5.3 million shares of ValueClick stock. The acquisition, which is intended to be a pooling of interests, is expected to approximately double ValueClick's domestic business, adding approximately $14 million in revenue and approximately $4 million in operating profit to ValueClick's 2000 results.
ValueClick, Inc., today announced the acquisition of StraightUP!, a marketing analysis firm with powerful, patented technology for tracking and reporting both immediate- and long-term marketing results across all media channels. The acquisition is the latest in a series of recent moves by ValueClick to further expand the tools available to direct marketers and advertisers seeking to both maximize and quantify the return on their marketing investments.
StraightUP!'s eTrax™ and eTrax Enterprise™ systems substantially enhance marketers' ability to understand the financial impact of their online and offline efforts, allowing them to track gross response, multiple conversion metrics, cost per action, and lifetime value of newly acquired customers. The StraightUP! products significantly add to ValueClick's portfolio of advanced technologies that provide performance-based accountability to advertisers.
Searchbutton, Inc., the leading ASP for enterprise-class search services, announced today that it has partnered with ValueClick, Inc. (Nasdaq: VCLK), the world's leader in performance-based Internet advertising solutions. The collaboration integrates Searchbutton and ValueClick technologies to provide advertiser and media publisher customers more targeted banner advertising based on keyword search, in addition to traditional targeting categories. This advancement increases ad effectiveness and return on investment for these customers. In turn, ValueClick and SearchButton will offer each other's products to their respective networks of customers to generate additional revenue and offer an enhanced user experience.
ValueClick's performance-based advertising model delivers to Web publishers and advertisers a cost-effective, results-oriented Internet advertising solution. ValueClick provides publishers of Web sites the opportunity to generate advertising revenue. ValueClick gives Internet advertisers a convenient way to predict ad effectiveness by guaranteeing to drive traffic to their sites.
ValueClick has developed highly automated systems and processes that make it easy for publishers of Web sites to join the ValueClick Network and an effective publisher referral program that facilitates growth and retention of publishers. By cost-effectively aggregating this underutilized inventory, ValueClick has developed a low cost solution for advertisers to access the visitors of these sites.
ValueClick, Inc. October 26,2000 introduced a strategic opt-in e-mail product, adding to its integrated product line and meeting the demand of advertisers seeking the best online media mix and greatest return on investment. In addition to offering a variety of segmentation and delivery options, ValueClick's opt-in e-mail product also provides advanced targeting abilities, which include multiple levels of highly granular geographic targeting, including state, county, city, zip code, or zip code radius.
"ValueClick is continually adding new service and product offerings to provide a truly multifaceted solution to advertisers and marketers who want to leverage online media," said Jim Zarley, Chairman and CEO of ValueClick. "With high response and conversion rates, opt-in e-mail is recognized as one of the most powerful online marketing tools available today. Our customers expect leadership from us in every category, and adding e-mail to our suite of products further demonstrates our total commitment to superior marketing performance."
According to eMarketer, there are more e-mail users than there are Web users. Therefore, E-Mail marketers gain the greatest potential reach on the Internet. Furthermore, the high sales conversion rates for advertisers using opt-in e-mail make it an extremely attractive marketing medium.
ValueClick's opt-in e-mail solution includes:
Solo e-mail for consumers who opt-in to receive targeted e-mail to match their interests
Newsletter Services that offer e-mail digests and informational newsletters
Special Banner and E-Mail Value Packages, providing powerful, cost effective combinations of targeted banners and E-Mail campaigns
Access to over 25 million double opt-in e-mail names Over 120 interest categories to select from
The introduction of opt-in e-mail follows ValueClick's recent announcements of enhancements to its advanced online ad targeting capabilities, the introduction of performance-based wireless advertising by ValueClick Japan, and the acquisition of Straight Up!, a marketing analysis firm with powerful, patented technology for tracking and reporting advertising performance.
Together, ValueClick's latest product developments form a total solutions package for advertisers and marketers, by delivering unsurpassed targeting, campaign testing and tracking, to maximize online advertising results, and therefore return on investment.
IF BANNER ADVERTISING ON THE INTERNET LOSES ITS APPEAL TO DIRECT MARKETING COMPANIES, VALUECLICK REVENUES COULD DECLINE.
ValueClick currently derive all of its revenues by delivering banner advertisements that generate clicks to their advertisers' Web sites. This business model may not continue to be effective in the future for a number of reasons, including the following:
click rates have always been low and may decline as the number of banner advertisements on the Web increases;
Internet users can install "filter" software programs which allow them to prevent banner advertisements from appearing on their screens;
banner advertisements are, by their nature, limited in content relative to other media;
direct marketing companies may be reluctant or slow to adopt banner advertising that replaces, limits or competes with their existing direct marketing efforts; and
direct marketing companies may prefer other forms of Internet advertising, including permission-based e-mail.
If the number of direct marketing companies who purchase banner clicks from ValueClick does not continue to grow, ValueClick may experience difficulty in attracting publishers and advertisers, and their revenues could decline.
IF VALUECLICK FAILS TO KEEP PACE WITH RAPIDLY CHANGING TECHNOLOGIES, THEY COULD LOSE CUSTOMERS OR ADVERTISING INVENTORY.
The Internet advertising market is characterized by rapidly changing technologies, evolving industry standards, frequent new product and service introductions and changing customer demands. The introduction of new products and services embodying new technologies and the emergence of new industry standards and practices can render existing products and services obsolete and unmarketable or require unanticipated investments in research and development. ValueClick's success will depend on their ability to adapt to rapidly changing technologies, to enhance existing solutions and to develop and introduce a variety of new solutions to address ValueClick customers' changing demands.
For example, advertisers are increasingly requiring Internet advertising networks to have the ability to deliver advertisements utilizing new formats that surpass stationary images and incorporate rich media, such as video and audio, interactivity, and more precise consumer targeting techniques. ValueClick's system does not support some types of advertising formats, such as video and audio, and many of the Web sites in ValueClick network have not implemented systems to allow rich media advertisements. In addition, an increase in the bandwidth of Internet access resulting in faster data delivery may provide new products and services that will take advantage of this expansion in delivery capability. If ValueClick fail to adapt successfully to developments such as these, ValueClick could lose customers or advertising inventory.
ValueClick purchase most of the software they use in their business from third parties. They intend to continue to acquire technology necessary for us to conduct their business from third parties.
ValueClick may also experience difficulties that could delay or prevent the successful design, development, introduction or marketing of new solutions. Any new solution or enhancement ValueClick develop will need to meet the requirements of their current and prospective customers and may not achieve significant market acceptance. If they fail to keep pace with technological developments and the introduction of new industry and technology standards on a cost-effective basis, their expenses could increase, and ValueClick could lose customers or advertising inventory.
IF VALUECLICK FAIL TO COMPETE EFFECTIVELY AGAINST OTHER INTERNET ADVERTISING COMPANIES, VALUECLICK COULD LOSE CUSTOMERS OR ADVERTISING INVENTORY AND THIER REVENUES COULD DECLINE.
The market for Internet advertising and related services is intensely competitive. Moreover, this competition is expected to continue to increase because there are no significant barriers to entry. Increased competition may result in price reductions for advertising space, reduced margins and loss of ValueClick market share. ValueClick currently compete with the following types of companies:
Internet advertising networks offered by several companies that focus on the traditional CPM model, such as DoubleClick, 24/7 Media and Flycast;
Internet advertising networks using a performance-based model, like us, offered by several smaller companies, such as TeknoSurf and ClickAgents;
providers of advertising inventory management products and related services, such as NetGravity, Accipiter and AdForce;
advertising, media agencies and other companies that facilitate Web advertising, such as America Online, NBCi, Yahoo!, SmartAge, GoNetwork, Excite@Home, Infoseek, Lycos and Microsoft;
Internet navigational, Web search engine companies and informational services and online service providers, such as America Online, Excite@Home, Lycos, Microsoft, Yahoo!, and Infoseek; and
traditional advertising and direct marketing media, such as radio, cable, television, print and direct marketing. ValueClick also compete with traditional advertising media, such as direct mail, television, radio, cable and print, for a share of advertisers' total advertising budgets. Many of their current and potential competitors enjoy competitive advantages over ValueClick, such as longer operating histories, greater name recognition, larger customer bases, greater access to advertising space on high-traffic Web sites, and significantly greater financial, technical and marketing resources. ValueClick may not be able to compete successfully. If ValueClick fail to compete successfully, they could lose customers or advertising inventory and ValueClick's revenues could decline.
1) To survive in high competitive internet environment a media company needs to be flexible and adoptive. It is vital for it to provide new services and new solutions in accordance with turbulence development of technology. ValueClick did it through significant enhancements to its stable of advanced online ad targeting capabilities, including the addition of DoubleClick's DART™ technology. Other enhancements include new hardware and software solutions from Oracle, Sun and Data Systems West, and powerful new back-end analytical and reporting tools. Together, ValueClick's latest developments considerably increase the options available to advertisers in targeting their online advertising efforts for optimal results. This suite of tools continues ValueClick's history of focusing on delivering results to advertisers with technology innovation and integration of best-in-class tools, while maintaining its commitment to consumer privacy.
In September 2000 ValueClick has successfully expanded into the wireless arena in Japan with the introduction of performance-based text advertising through i-Mode-compatible cellular phones. This strategic product offering, developed by the company's Japanese subsidiary, ValueClick Japan, establishes ValueClick as the world's first performance-based mobile advertising network and lays the groundwork for its expansion into wireless advertising around the world. It is another great example of company development through finding new niches for its business.
Leveraging the i-Mode technology platform developed by NTT Mobile Communications, known as NTT DoCoMo, ValueClick Japan is now testing its performance-based wireless ad serving system, MobileClick™. Currently, there are more than 180 top quality sites in the ValueClick Japan mobile network, generating approximately 900,000 page views per day during the beta testing stage. ValueClick Japan has already run several trial advertising campaigns with major consumer products firms such as Nissin Food Products Co., Shiseido, Matsushita, Honda, Sanwa Bank, and Kirin Brewery Co. A full launch of MobileClick™ is planned for October 1st, 2000.
2) To be successful means today to be global. It is very interesting aspect of today's e-business especially for Global eBusiness class. ValueClick has recently announced the addition of Toronto, Canada to its expanding list of recently opened international offices including Paris, France; Munich, Germany; and Sao Paulo, Brazil. This international expansion mirrors the strategy ValueClick employed in the U.S. and Japan, where it pioneered performance-based advertising. Currently, ValueClick reaches over 30 percent of the U.S. Internet population (Media Metrix) and over 31% of the Japanese Internet population (Nielsen/Netratings). ValueClick is introducing results-based advertising as a cost-effective method to drive Internet users to advertisers' and marketers' websites, thereby reinforcing its leadership position in performance-based advertising around the world.
3) To be successful means today to be aggressive. ValueClick has acquired a number of leading Internet companies recently making the best of downward trend in internet industry. Among companies that were acquired by ValuClick are onResponse.com, a leading online affiliate advertising firm; Click Agents.com, Inc., another leading provider of performance-based online advertising solutions; StraightUP!, a marketing analysis firm with powerful, patented technology for tracking and reporting both immediate- and long-term marketing results across all media channels.
These acquisitions will greatly improve a competitive position of ValueClick. The acquisition of StraightUP!, for example, follows recent announcements from ValueClick of enhancements to its advanced online ad targeting capabilities, including the addition of DoubleClick's DART™ technology and new hardware and software solutions from Oracle, Sun and Data Systems West. Together, ValueClick's latest developments form an end-to-end solutions package of targeting, testing, and tracking, considerably increasing the options available to advertisers in optimizing their advertising efforts for maximum results.
Solo e-mail for consumers who opt-in to receive targeted e-mail to match their interests
