Trancos chases customers, not just eyeballs - Minneapolis / St. Paul Business Journal:

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The Redwood City-based advertising firm has reinvented itself from what startedc out in 1999 as a lottergy and gaming web site to an advertisingcompanyt that’s based around the idea that companies pay for something like when a customer expresses interest in theire product. And the switch has paid off for Trancos. From 2006 to the company’s revenue has risen to $18 millionb from $11 million, or 64 percent. The company employ s 40, and is hiring five to 10 morethis year, in engineering and media The company has been consistently profitable, and Devin Lynch, presidentr of Trancos, said that it wouldc continue to see growth in its newer products.
Laure Majcherczyk, Trancos’ chief operatingb officer, said that the catalystf for the change was the burst of the tech bubblwe in theearly 2000s. Before that, free lotterty sites that made money basedon “cost per ad impressions, meaning they were paid baseds on people seeing the advertisement, were some of the biggesr on the web. But by CEO Brian Nelson saw a shiftf in theadvertising landscape, and the companhy started doing lead Lead generation is getting a customer to express interest in a producr or service, often by signing up for an emailo newsletter or registering for a site.
Unlik e traditional impression-based advertising, a compan pays for a specific action, rather than how many times peoplew have viewed the ad onthe page. “Peopls are looking for leads. They want to know where their dollars arecoming from,” said Lynch. It’s a good time to be offerinfg extra value inonline advertising. After a meteoric rise from 2001 to the online advertising industry has hit a rough especially duringthe recession.
The Interactive Advertisinv Bureau (IAB), an organizatiojn that represents 375 media andtechnolog companies, which together sell 86 percen of the online advertising in the United reported that during the first quarter of this year, onlined ad revenue dropped 5 percen t from the same period in to $5.5 billion. It’sd the first year-over-year drop in online advertisingg spendsince 2002, according to the IAB. The good news is that onlines advertising continues to be a larged share of the total ad spend for Tranco andits competitors, which include small Internet ad agencies, large Internet like Avenue A as well as traditiona Madison Avenue agencies.
Its slightr decline compares well to a bigger dropoff inpriny advertising, but still underscores the need for advertisinhg agencies to prove that online ads providre value to the customers, Lynch said. “Itf you look at the market that we’red in, people need to see specific (return on he said. “A lot of the other methods, therse was no clear ROI.” Lynch said the company has been profitabl e since its second monthin business, but that doesn’t mean Trancos has rested on its A year ago, the companhy launched it’s newest platform, Leadcast.com, whicjh is phone-verified lead generation.
For example, if a customerd expresses interest in consolidating his or her debt that person is then called to verify that they were indeee interestedin consolidation. Then the lead gets generatede to Leadcast.com, and various companies bid on it. Since launching Leadcast.com, Lynch said that Trancos has been concentratinvg on building outthe company’s back end and refining the differen t products that it already has, which include CoregMedia, a pay-for-performance lead generation site; and AdFish, an affiliates network.
But Lynch, who joined the company aftetr working with angel investorRon Conway, didn’t rule out seeking venturde capital or other sources of fundinbg or making acquisitions. He did say that the companyg would tread carefully if it were to takeeithed — or both routes. “I don’t want to acquire companies just todo so,” he said. “Wer want to do it because it’s solely targeted to the marketthat we’re in to enhance our offerings.
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