• by Paul Gough , October 22, 2003

The parent company of Avenue A and iFrontier Wednesday said it would soon announce what it claimed was the first proof that an online advertising campaign can drive sales offline.

Word of what aQuantive Inc. called "an industry first" was disclosed by Brian McAndrews, president and chief executive officer of the Seattle-based interactive company, in a conference call with Wall Street analysts to discuss third-quarter fiscal results. aQuantive was short on details, saying that it hoped to be able to release more information publicly within the next week or two.

AQuantive was mum about specifics other than to say Avenue A would shortly be discussing a "proprietary and patent pending capability" to measure the impact of online advertising to offline sales. McAndrews said that one of Avenue A's retail clients has been driving 20 percent sales from online marketing based on new data collected using the capability. The client's name wasn't disclosed.

"Since the inception of Internet advertising, there has been much speculation of what, if any, connection there is between online advertising and offline sales," McAndrews said. "While it intuitively makes sense that there is a correlation, Avenue A will shortly announce that we have proof positive results for what we have believed all along: That there is a direct link between the two."

Following the analysts call, an aQuantive spokesman declined to provide MediaDailyNews with details.

aQuantive was less guarded with information about its third quarter results. The company reported $58.6 million in revenues, up 70 percent from the same period a year ago. It expects even more than that - between $60 million and $65 million - for the fourth quarter and will be $17 million in the black at that point. Net income was $3.4 million in the third quarter, compared to a loss of $677,000 a year ago.

McAndrews and aQuantive Chief Financial Officer Michael Vernon said 2004 looked positive although it wasn't clear what that would be yet. Vernon said client and company budgets haven't come yet and it would be some time before that happened.

"We don't know at this time what the numbers for next year will look like," he said.

But McAndrews said there was a strong path for growth in the next year, as skepticism that had marked the past few years in interactive advertising gives way to an understanding of what the Internet can do for high-impact branding and direct response. Vernon said that it was likely that the newer clients would spend modestly for a few quarters until a comfort level has been reached. He said that aQuantive expected to see higher spending from clients that began this year.

The company owns Avenue A and iFrontier, both interactive agencies, as well as Atlas DMT, a digital marketing technology provider.