Special Report: Pixelpark expands its horizons to b-to-b sector

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Although Pixelpark is known in Europe for innovative designs and eye-catching online shopping sites, the interactive advertising agency wants a new identity.

Germany's largest new-media agency would like to be known as a provider of a wide-range of business solutions, with less emphasis on consumer-targeted Web sites and advertising.

"The biggest potential for growth in Europe right now is in business-to-business, and at the same time business-to-consumer business models have become much riskier," says Paulus Neef, 39, the agency's founder and CEO, echoing a sentiment expressed by a number of U.S. interactive agencies.

ONE-STOP SHOP

Although he still loves the high-tech design that led him to create Pixelpark in 1991, Mr. Neef's love of challenge is motivating him these days to embrace fast-moving changes in the greater e-business world. And he wants to do it on a global scale for the agency that now gets 57% of its revenue from clients in Germany.

"We no longer want to define ourselves as an interactive ad agency because clients need much more from us. We want to be a one-stop shop for them, providing innovation for their businesses in everything from integrating e-commerce strategies to information technologies," Mr. Neef says.

ARMY OF EXPERTS

In its early days, Pixelpark focused on designing Web pages because "all you could do at that time was build the front end of a business' Web strategy." But Mr. Neef never saw the agency as merely a design shop. Early on, he was eager to provide end-to-end solutions for e-business as soon as technology allowed. He says Pixelpark was a pioneer in developing back-end strategies for product sales and fulfillment.

"We anticipated the trend of doing e-business in Europe and we were one of the first to link the front-end with logistics, fulfillment and other functions of the product supply chain," he says, citing examples such as the agency's work with Germany's Lufthansa Airlines, Bertelsmann and DLR, Germany's aerospace development center.

During the past nine years, Pixelpark has added an army of experts in consulting, systems and technology engineering to augment its marketing and design resources, becoming a quasi-consultancy as well as an ad agency.

GROWTH STREAK

Pixelpark was poised to become Europe's No. 1 interactive advertising shop this spring until a planned acquisition of merged Swedish IT consultancies Cell Network and Mandator was called off.

No plans have been announced to revisit that deal, but Pixelpark has been on a growth streak in the past year by adding other technology resources through acquisition, including companies specializing in logistics and back-office capabilities.

Pixelpark went public in Germany in October.

For clients including Lufthansa, Barman Ersatzkass (Germany's largest healthcare fund) and Swiss financial powerhouse Credit Suisse Group, Pixelpark devised strategies far beyond Internet site design. Work included building intranets for executives and preferred customers as well as interactive catalogs to shop online.

More recently, Pixelpark created the international Web site (www.hugo.com) for Procter & Gamble's Hugo fragrance and has worked the past three years with P&G rival Unilever on a wide range of online product-marketing efforts in Europe.

Thanks to its knowledge of the region's complex and unique markets, Mr. Neef says he believes Pixelpark has an advantage over other agencies, including U.S.-based global agencies, in providing interactive business solutions for global clients in Europe.

"There is tremendous room for growth in Europe and few companies are prepared to provide the back-office solutions needed for e-commerce and intranet functions. Because markets and countries vary so much, you have to discover, invent and create unique and special models for each country, in many cases," he says.

With an expanding network of offices around the world, Pixelpark opened a New York branch in 1998, but the company has not experienced tremendous growth in the U.S. yet.

MERGERS AHEAD?

"There is so much consolidation in the U.S. among interactive advertising agencies, we prefer trying to create a big presence through acquisition vs. organic growth," he says. The company--to grow by acquisition, through a merger or partnership with a major U.S. advertising agency--already has entertained proposals from "several of the largest global ad agencies in the U.S."

Even so, Pixelpark's focus will remain on European markets.

"American companies want to expand in Europe, particularly with e-business, but the barriers are very high and they're looking for an easier way to reach multiple countries through alliances and partnerships," he says.

Copyright June 2000, Crain Communications Inc.

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