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Ad market Reply.com has filed with the Securities and Exchange Commission to raise up to $60 million in a public offering. The company is a marketplace for online sales leads, where companies can buy information about web users that have shown interest in buying their products. TechCrunch has a rundown of the company’s current financials, which include a 75 percent revenue increase in super-tough 2009.
Here’s what I wrote about Reply last October:
Targeted search and display ads are the bread and butter of online advertising today. But ad networks like Reply are learning how to deliver qualified leads — in Reply’s case, potential buyers for cars, homes, home improvement, and insurance deals whose self-selected qualifications that result in up to double the conversion rate from ad to purchase. The company has seen conversion rates climb by 50 to 100 percent over the rates for search and display ads, by categorizing leads in refined ways for automated buying and selling.
Reply works by collecting pre-qualifying information from Web surfers — “I’m looking to buy a home in 94145,” for example — then selling their click-throughs on an ad to a buyer looking for a matching profile. The genre is called lead generation or just “lead-gen.”
Generating leads is seen by many marketers as the next step in online advertising. Why? Because lead generation has the potential to grow the market for online ads by making them more effective and less wasteful. Today, Google’s AdSense pulls in $20 to 30 billion per year, but Google only accounts for about one-tenth of all ad spending.
Companies like Reply are chasing not just those online ad dollars, but the $300 billion in offline advertising that could be pulled online if ad networks could promise better bang for the buck, and better-than-offline control over how ad inventory and qualified clicks are bought and sold.
Reply was founded in 2001 by Payam Zamani, who previously founded Autoweb back in the first Internet boom. Zamani has about 100 employees headquartered in New York. The company, which Zamani bootstrapped on $1.5 million of his own money, has raised another $13 million from Scale Venture Partners, $4 million from Outlook Ventures, and $3 million from individual investors including former Apple CFO Debi Coleman.
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