• by Paul Gough , October 30, 2003

Third-quarter revenues fell at Modem Media but the interactive agency said it was upbeat about prospects for the New Year.

Revenues dropped both quarter-to-quarter and in a comparable setting, with third-quarter 2003's revenues of $14.6 million down from the $17.8 million a year ago and the $15.5 million in the second quarter. Modem Media's revenues were a little lighter than expected, said President and Chief Executive Officer Marc Particelli. Their 16 new client wins so far this year, with three of the firms becoming top-10 clients. Two of the previous top 10 clients continue to do business, although at a lower level, and one no longer works with Modem Media.

Modem Media expects revenues of between $14 million and $16 million in the fourth quarter and full year revenues around $61 million. In the fourth quarter of 2002, Modem Media posted revenues of $15 million. Revenues in 2002 were $70.1 million, compared to $97.1 million in 2001.

Particelli said that he was cautiously optimistic about Modem Media's outlook for 2004. He said the company's focus would be on a return to growth. He noted the recent hiring of two senior-level marketing executives who are charged with expanding Modem Media's database marketing efforts. Particelli said Modem Media expects to hire at least five more senior hires and add resources in an effort to expand its business.

He said that a majority of Modem Media's clients seem to intending spend more on interactive marketing next year, though he warned that the first quarter is traditionally light. He said there were strong prospects "in the pipeline."