It may be named for a rustic street on Manhattan's Lower East Side, but the media and data marketing firm Avenue A (profiled in last week's Tech section) is edging closer to Madison Ave. The privately held Seattle-based company, which tracks ads on the Internet for more than 40 clients, announced ambitious expansion plans this week, including a $19 million infusion from venture capitalists.
Seattle's latest high-tech player is a leader in a relatively small field; online advertising revenues last year were about $2 billion, a fraction of what's spent in traditional outlets like television, newspapers, and radio. But analysts say the amount will double annually as retailers and e-commerce companies rely on the Web to sell—and advertise—products.
Avenue A's ability to purchase and place ads on Web sites and portals, then use technology to track how users respond to the spots, has been a hit with clients such as Eddie Bauer, CitySearch, and Gateway. Additionally, the company has begun a precision targeting campaign with U-Bid in which ads for the online auction site will be sent to consumers—on sites where U-Bid already advertises—based on their prior online spending habits.
Avenue A's chief financial officer, Bob Littauer, says he sought a more modest investment to help shepherd growth, but two venture capitalists in Silicon Valley and one in Seattle came up with a total of $19 million. As a result, the firm will move to more spacious downtown headquarters, expand by year's end from 85 to 125 employees, and will look to acquire other companies. And IPO watchers beware: Littauer doesn't rule out the possibility of going public. "We're focused on getting big fast," he says.