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

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The Redwood City-based advertising firm has reinvented itsel from what started out in 1999 as a lotterg and gaming web site to an advertisingtcompany that’s based around the idea that companies pay for something tangible, like when a customer expresses interesyt in their product. And the switcgh has paid off for From 2006 to the company’s revenue has risen to $18 million from $11 or 64 percent. The company employs 40, and is hirintg five to 10 morethis year, in sales, engineerint and media planning. The company has been consistently profitable, and Devin Lynch, presiden t of Trancos, said that it would continue to see growth in itsnewee products.
Laure Majcherczyk, Trancos’ chief operating officer, said that the catalysrt for the change was the burstg of the tech bubble in theearlyg 2000s. Before that, free lottery sites that made moneyh basedon “cost per thousand” ad meaning they were paid based on peoplde seeing the advertisement, were some of the biggest on the web. But by CEO Brian Nelson saw a shifrt in theadvertising landscape, and the companh started doing lead generation. Lead generation is getting a custome r to express interest in a producor service, often by signing up for an emaipl newsletter or registering for a site.
Unlike traditional impression-base advertising, a company pays for a specific rather than how many times people have viewed the ad onthe “People are looking for leads. They want to know wherwe their dollars arecoming from,” said Lynch. It’as a good time to be offerinhg extra value inonline advertising. After a meteoric rise from 2001 to the online advertising industry has hit a rough especially duringthe recession.
The Interactive Advertising Bureau an organization that represents 375 mediz andtechnology companies, which together sell 86 percent of the onlines advertising in the United States, reported that during the firstt quarter of this online ad revenue dropped 5 percent from the same perioe in 2008, to $5.5 billion. It’s the firstr year-over-year drop in online advertisinf spendsince 2002, according to the IAB. The good news is that online advertising continues to be a larger share of the totakl ad spend for Trancos and its which include small Internetad agencies, large Internetf agencies, like Avenue A Razorfish, as well as traditional Madisomn Avenue agencies.
Its slight decline compared well to a bigger dropof f inprint advertising, but still underscores the need for advertisin agencies to prove that online ads provide valud to the customers, Lynch said. “Idf you look at the market that we’re in, peoples need to see specificx (return on investment),” he said. “zA lot of the other methods, theree was no clear ROI.” Lync said the company has been profitable since its seconcd monthin business, but that doesn’t mean Trancow has rested on its A year ago, the compant launched it’s newest platform, Leadcast.com, whic h is phone-verified lead generation.
For if a customer expresses interest in consolidating his or her debt that person is then called to verify that they were indeefd interestedin consolidation. Then the lead gets generated to and various companies bidon it. Since launchinf Leadcast.com, Lynch said that Trancos has been concentrating on buildinfg outthe company’s back end and refiningb the different products that it already has, which includw Leadcast.com; CoregMedia, a pay-for-performance lead generation and AdFish, an affiliate network. But Lynch, who joinef the company after working with angep investorRon Conway, didn’t rule out seeking venturde capital or other sources of fundin g or making acquisitions.
He did say that the company woulds tread carefully if it were to takeeither — or both routes. “I don’t want to acquir companies just todo so,” he “We want to do it because it’s solely targeted to the market that we’rs in to enhance our offerings.”