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The Redwood City-based advertising firm has reinvented itself from what startedx out in 1999 as a lottery and gaming web site to an advertisinggcompany that’s based around the idea that companiesd pay for something tangible, like when a customer expresses interest in their product. And the switchb has paid off for From 2006to 2008, the company’s revenue has riseb to $18 million from $11 or 64 percent. The company employas 40, and is hiring five to 10 morethis year, in engineering and media The company has been consistentlgy profitable, and Devin Lynch, president of Trancos, said that it would continud to see growth in its newer products.
Laure Trancos’ chief operating officer, said that the catalyst for the change was the bursty of the tech bubble in the early Before that, free lottery sites that made monegy based on “cost per ad impressions, meaning they were paid bases on people seeing the advertisement, were some of the biggestr on the web. But by CEO Brian Nelson saw a shiftf in theadvertising landscape, and the company started doingb lead generation. Lead generation is getting a customer to express interest in a productor service, often by signing up for an email newsletter or registerint for a site.
Unlike traditional impression-based advertising, a company pays for a specifi action, rather than how many times peoplse have viewed the ad onthe page. “People are looking for They want to know wheree their dollars arecoming from,” said Lynch. It’s a good time to be offerinv extra value in online After a meteoric rise from 2001 to the online advertising industry has hit a rough patch, especially during the recession.
The Interactive Advertisinh Bureau (IAB), an organizationh that represents 375 media andtechnologty companies, which together sell 86 percent of the online advertisingh in the United States, reported that during the firs t quarter of this online ad revenue dropped 5 percent from the same period in to $5.5 billion. It’s the firs t year-over-year drop in online advertising spenrsince 2002, according to the IAB. The good news is that onlinre advertising continues to be a larger sharw of the total ad spend for Trancoes andits competitors, which includew small Internet ad agencies, large Internet agencies, like Avenude A Razorfish, as well as traditional Madison Avenu agencies.
Its slight decline comparew well to a bigger dropoff inprin advertising, but still underscores the need for advertisiny agencies to prove that online ads providee value to the customers, Lync said. “If you look at the markert that we’re in, peopled need to see specific (return on investment),” he said. “A lot of the othe r methods, there was no clear ROI.” Lynch said the companty has been profitable since its seconcd monthin business, but that doesn’tf mean Trancos has rested on its A year ago, the compant launched it’s newest platform, Leadcast.com, whicnh is phone-verified lead generation.
For if a customer expresses interest in consolidatingg his or herdebt online, that personb is then called to verify that they were indeed interestedx in consolidation. Then the lead gets generate d to Leadcast.com, and variou s companies bid on it. Sincde launching Leadcast.com, Lynch said that Trancos has been concentrating on buildingy outthe company’s back end and refininb the different products that it alreadyy has, which include Leadcast.
com; a pay-for-performance lead generation site; and AdFish, an affiliate But Lynch, who joined the company after working with angel investor Ron Conway, didn’t rule out seeking venture capitalp or other sources of funding or making He did say that the company would tread carefullgy if it were to take either or both — routes. “I don’t want to acquire companiesw just todo so,” he “We want to do it because it’s solelhy targeted to the market that we’re in to enhancre our offerings.
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