While DoubleClick anticipated an IPO price of $17 per share, the market opened at $29 per share on Feb. 20, surprising many industry analysts and marketers. Double- Click raised a reported $60 million in the initial offering.
For DoubleClick, which built its business on its advertising network, the strategy to move into sponsorships is unexpected by both its competitors and clients. However, DoubleClick executives say the move works to grow its bottom line while building closer strategic relationships with clients.
FULL-SERVICE CREATIVE TEAM
DoubleClick assembled a sponsorship team of nine people late last year, and for the first time, plans to hire a creative director and a graphic designer.
"Our primary commitment is to our network partners," said Chris Theodoros, VP-director of creative sponsorship strategies at DoubleClick. "Our intention is not to compete with agency creative departments, but simply to supplement our efforts" and "to insure our partnerships."
STRATEGIC MARKETING PARTNERS
Jamie Byrne, online marketing manager, agreed. "We don't have any hang-ups about the creative. In most cases, I would prefer the agency do the creative," he said. "This helps our relationships with our sites and says we're not just selling banners but we're really strategic marketing partners."
While the focus is on supporting the 75-plus sites in the ad network, the sponsorship team also goes directly to advertisers and their agencies with ideas and plans.
For example, Mr. Byrne's team recently came up with an idea and did a mock-up of an ad with a photo and extended copy onto the Kelley Blue Book site.
Mr. Theodoros' sales team used the mock-up to sell the idea to Volvo Cars of North America, American Honda Motor Co. and American Isuzu Motors.
Other sponsorship wins for DoubleClick include: a Dr Pepper/Seven Up-sponsored basketball game on Macromedia's new ShockRave entertainment site (www.shockrave.com), where the game is not only branded, but a 7 UP cap is the user-controlled player; a Datek-sponsored Dilbert Financial Indices area (www.datek.com); and a Columbia House-sponsored online record promotion for Billboard's site (www.billboard.com).
A NATURAL EVOLUTION
"It's reflective of the second generation of the Web," said Gary Arlen, president of consultancy Arlen Communications. "In the same way that Yahoo! moved from just being a search engine to being a content area with all the advertising and support that goes along with it, it seems DoubleClick is moving into integrated marketing services."
Sponsors can pay for the advertising in part on an impression basis, but more often on a flat-fee, real estate basis. Mr. Theodoros estimated the flat-rate sponsorships range in cost from "the low five figures to the high sevens."
SPONSORSHIPS GAIN MOMENTUM
Mr. Arlen said that while sponsorships are just gaining steam as a trend, forward-thinking advertisers will use them more in 1998.
"It reflects the reality that the Web is moving beyond a traditional buy. I think DoubleClick, along with others, is seeing the opportunity offered by that shift away from traditional buying," he said.
In addition to creating sponsorships, DoubleClick is also helping clients coordinate electronic commerce deals on sponsored sites with revenue share models.
COORDINATING E-COMMERCE DEALS
For instance, for Valentine's Day, DoubleClick brought together 10 advertisers and set up the Cupid Shop, where merchants including PC Flowers, Godiva Chocolatiers and CDnow sold products in a one-stop shopping area on the AltaVista search engine. DoubleClick plans to continue the seasonal or holiday commerce shops.
DoubleClick isn't the only ad network eyeing sponsorships. For example, Real Media, which represents many online newspapers, is giving back some ad repping responsibilities to its client New Century Networks so that it can pursue more sponsorships.