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ValueClick: Clicking Its Way to an IPO

The onset of the Internet has challenged marketing specialists to come up with new and innovative techniques. Just getting consumers to look at a Web site can be a lot more difficult than most businesses imagine. ValueClick eases that burden.

In fact, the company plans to do an IPO. As a sign of the substantial demand for the shares, the price range has been boosted from $11-13 to $18-$20. The lead underwriter is Goldman Sachs & Co and the proposed ticker symbol is VCLK.

ValueClick is a global provider of Internet advertising solutions. They are focused on a cost-per-click (CPC) advertising solution where the advertiser pays only when a customer "clicks" on a banner advertisement. Some of their products include real-time statistical reporting, Web site categorization capabilities, the ability to exclude competing advertising campaigns and distribution of advertisements on a comprehensive or targeted basis (broken down into 15 categories).

Another key to the success of ValueClick is the screening of its customers.

Believe it or not, ValueClick does not just accept any paying customer. They want their network of Web sites to contain quality. According to ValueClick, the company currently rejects approximately 80% of the Web sites that apply to their network due to a failure to meet their quality standards.

ValueClick's customer base consists of more than 10,600 small- to medium-sized businesses, which are primarily direct marketing and e-commerce companies.

This network has a reach of approximately 28 percent of U.S.-based Internet users in January 2000.

Forrester Research projects that Internet advertising in the United States will grow from $2.8 billion in 1999 to $22.2 billion in 2004, a compound annual growth rate of 57 percent. Forrester Research also projects that performance-based advertising models will account for 50 percent of online advertising budgets by 2003, up from 15 percent in 1999.

ValueClick's revenues have shown an amazing increase since their inception (in May 1998). From their inception through December 1999, revenues have gone from $2.1 million to $20.3 million.

The need for cost-effective online advertising solutions has spurred ValueClick on. The idea of turning down customers may sound ridiculous, but to ValueClick it is just good business sense. So far, it's a formula that works.