Well Timed Releases
As many as 6000 people converged in San Francisco this week for Ad:Tech – an event known for its busy exhibit hall, conference sessions, and copious night life attended by almost all in the online advertising industry. The show ran from Monday through Wednesday with its trademarked exhibit hall being open the first two days. While certainly a chance for those in the internet world to meet and greet past, present, and future clients as well as check out what other companies in this arena are doing, Ad:Tech is anything but time off. Besides using this time to physically display their own goods and services, many companies use this show as a time to coordinate strategic messages. This week’s Trends pulls together some of the industry news and press releases timed during Ad:Tech San Francisco 2005.
Ad:Tech is all about internet advertising, so one of the best places to start when summarizing the wealth of information disseminated during this show is by looking at news regarding the health of the industry. Good news there, all signs point to continued growth. While not a surprise given the rather frequent messaging on the strength of internet advertising, recent studies predict the online advertising market to eclipse $11 billion in 2005, a 20%+ increase over the already record year in 2004. As Morgan Stanley analyst Mary Meeker said during Monday’s keynote speech, “…internet advertising spending has nowhere to go but up." These comments are aided by data showing that internet advertising spending currently represents less than 4% of all advertising dollars, an interesting contrast in spending habits being eBay, who spends 62% of all advertising dollars online.
Whether or not all are directly timed with Ad:Tech, many of the releases consist of companies announcing their first quarter earnings. Earlier this week, Google oogled everyone with their Q1 revenues of roughly $1.26 billion and profits of $369 million dollars – a 93 percent improvement in revenues over the same quarter a year ago and an almost 600 percent increase in profits. Not to be outdone, Yahoo also posted impressive earnings. Their sales rose 55% to $1.17 billion dollars, and they saw net income reach almost $205 million, a 200 percent increase over the same period last year. Other companies also posted strong earnings. These include eBay with $1 billion dollars in revenue and $256 million in first quarter profit and AskJeeves.com who announced revenues of $94 million dollars, up from $34 million dollars a year ago.
Deal flow announcements also made waves during Ad:Tech. Among the biggest news not just in terms of deal size but interest came from Adteractive who reportedly will receive $100 million dollars from Global Atlantic Partners. This tops the mighty $60 million received by email marketing masters Datran Media from VantagePoint Ventures. The rumored Adteractive deal resembles the $75 million deal Fastclick completed not too long ago as it will allow the founders to take money off the table, something nine other internet companies have done in the past 18 months. Another sign of interest in the online advertising space comes from the $20 million raised by WhenU.com. The funding by ABS Capital could help validate not only WhenU but the contextual desktop space which has drawn much scrutiny. DoubleClick, the industry pioneer and dot-com survivor, also exists in the deal flow mention having announced their intent to sell the company to private equity firm Hellman & Friedman for just north of $1 billion. It’s a noteworthy deal given the company’s history and brand in the space, but unfortunately, the deal is not significant with respect to their recent business activities.
Besides earnings and deal flow, Ad:Tech news also includes product enhancements, new hires, and new partners among other things. This holds true in the case of online video ad delivery provider VeyeTech who touts their patent pending ViewStart product. Fastclick, for example, used the week at Ad:Tech to announce that it has climbed to the number two position in comScore Media Metrix’s March 2005 Ad Focus Ranking, reaching more unique U.S. users (119 million) than Yahoo. ValueClick used the time to announce new publisher relationships. Crystal Semantics, “the leader of contextual Internet search solutions and developer of the world’s first patented Sense Engine Technology,” announced the inclusion of its technology by upcoming ad network Experclick. And, Revenue.net, a newer entrant in the internet advertising space, used the show, to announce that it surpassed 1 billion impressions monthly. The slightly more than a year old internet advertising firm was the same one that brought wireless internet access to Ad:Tech for the first time in the event’s history. And so on.
The list of releases it seems goes on and on, and the task of including them all, even those that pertain to internet advertising, would exceed the attention span and interest of the most dedicated reader. What this does suggest, as all who attended the show most likely felt, is that, while certainly a little frothy, our space still offers room for growth. Like the industry we operate in, the show was a crowded and dizzying one. But, with the crowds and clutter came representatives from companies not often, if ever, seen – from investors to big brands. The show was in many ways a physical validation of the continuing industry coverage and worth the coverage it spawned.
