By Robyn Greenspan

E-commerce scored during the second quarter of 2003, increasing 27.8 percent over 2Q 2002 to $12.477 billion, according to the Census Bureau of the Department of Commerce.

E-commerce sales in the second quarter of 2003 remained steady from the first quarter, accounting for 1.5 percent of total sales, while online retail accounted for 1.2 percent of total sales in the second quarter of 2002.

If July's online shopping traffic is any indication, the third quarter could continue the year's upward trend. Findings from comScore indicate that online shoppers spent more than $500 million on apparel in July, as parents and students began back-to-school preparations. The firm reports online spending on apparel and accessories was up 43 percent in June and 44 percent in July versus 2002 levels, and more than 34 million Americans visited an apparel site in July — up 12 percent from June.

According to Nielsen//NetRatings, Ebay was the most widely used shopping aggregator, reaching 30.6 percent of the active online population logging on from home and work in July 2003. Amazon reached 26.1 percent of surfers in July 2003, followed by MSN Shopping with 11.5 percent of surfers.

In July 2003, PriceGrabber was the fastest growing in the shopping search category with a year over year growth rate of 127 percent. NexTag experienced a significant increase in traffic growing 116 percent.

Media Post

Domino’s Pizza, the recognized world leader in pizza delivery, announced that it is teaming up with eBay, The World’s Online Marketplace, to bring the online experience to Domino’s customers nationwide. To kick off the program, beginning August 14, Domino’s will deliver to its customers, via 15 million box-tops, special “Back to School” offers including the opportunity to win one million eBay Anything Points (which is the equivalent of $10,000 to spend on items available on eBay.com) or a chance to win one of 100 Domino’s gift certificates valued at $10.00 each. Other promotional offers include discounts on the purchase of textbooks at Half.com, an eBay company, and a special incentive in eBay’s computer category.

The second promotion – eBay’s “Stay True to Your School” college football campaign - presented by Domino’s Pizza, will be delivered through an additional 15 million box-tops, reaching college football fans and alumni across the nation. Special prizes include an Ultimate Homecoming Trip valued at $15,000, which awards the winner and five friends a trip to a college football game including $6,000 cash, airfare, hotel accommodations, rental car and game tickets. In addition, ten recipients will receive a $500 Domino’s Pizza gift certificate, and 100 winners will receive a Domino’s Pizza gift certificate valued at $10.00.

By Erin Joyce

New figures out from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) show that Internet advertising revenues were up by 7 percent to $1.7 billion in the first three months of 2003, the second straight quarterly increase in two years.

Details about key drivers are expected in September when the IAB has more complete data. But the early results suggest a continuation of current trends that helped boost the second half of 2002, namely the hot paid search market and the growth of rich media.

For now, at least, top line numbers the IAB has collected show two straight quarters of rising online ad sales in a two year period. The first quarter's $1.692 billion in revenue was up by 7 percent from the fourth quarter of 2002, and up by 11 percent compared with the first quarter of last year, the IAB said.

The bureau said the first quarter figures in the Internet Ad Revenue Report, which was conducted for the IAB by Price WaterhouseCoopers, were estimated by surveying and compiling 2003 first-quarter data from the top 15 online ad sellers. They were then extrapolated to calculate the total industry revenue figure.

"Advertisers follow the timeless creed of go where your consumers are, and the interactive advertising market is no exception," said Greg Stuart, president and CEO of the IAB, in a statement. "Consumers are going online in droves and the ad dollars are following closely behind."

Tom Hyland, a partner with PricewaterhouseCoopers and chair of the accounting firm's new media group, said the early results show that the future for interactive advertising appears to be on strong footing and poised for gradual and sustained growth.

"Many of the factors contributing to last quarters up-tick seem to have held momentum, including improved data for advertisers to analyze as they have now been engaged in the market for a longer period of time," he said.

The survey collected data about online advertising from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising. The IAB said the first and third quarter revenue reports are estimates, with the actual figures being released along with second and forth quarter data.

by Gerry McGovern

What’s really important to measure for your Web site?

First, you need to measure how successful you are at creating, editing and publishing content. These are your Web content management processes.

Second, you need to measure reader behavior. There will also be some core Web site performance issues to measure. Here, I’ll examine key Web content management “measurables.”

These are questions you need to answer:

• Is the Right Content Being Published for the Right Reader?
Have you identified the right readers for your content, and are you publishing the right content for them? How effective are you in reaching these target readers?

• How Quickly Is Content Getting Published on the Web Site?
Time-to-market is a major measure of the efficient industrial organization. Time-to-publish is a key measure of the information organization. Is the right content getting published as fast as possible?

• How Well Is Content Being Edited?
Publishing quickly does not mean publishing sloppily. How well is content being edited? How well does published content reflect the style and tone of your organization? (You cannot even begin to answer this question if you don’t have a Web style guide.)

• Is the Publishing Schedule Being Adhered to?
Professional publishers have a publishing schedule—and they stick to it. Just as in entertainment (where the show must go on!), in publishing the publication must get published on time, every time. If you agree to update your Web site at 10 AM. every Monday, that must happen. Not a minute later.

• Is Out-of-Date Content Being Removed Quickly?
One of the most important lessons of the Web is to publish the content you can manage. The lifecycle of content does not end at publication. It ends when the content is removed from publication. How quickly is out-of-date content being removed from your Web site?

• How Are Authors and Editors Managed?
Authors and editors must be motivated to write and edit quality content. They must know that if they publish quality content, they will be rewarded. They must also know that if they publish poor-quality content, there will be a price to pay.

• Is the Metadata of a Sufficient Quality?
Metadata is the ugly duckling of Web publishing. Writers and editors think that metadata is something the IT department should look after. IT thinks it’s something you can automate using software. Wrong on both counts. Metadata is a fundamental writing-for-the-Web skill. Poor quality metadata is poor quality Web content.

• How Is Reader Feedback Managed?
If you’re in charge of a Web site, then one of your most important duties is to talk to your readers. Every week you should communicate with a minimum of one reader. What do they like about your Web site? What do they not like? Also, when readers get in touch, how fast are you getting back to them?

by Newswire Report

Hitwise, the online competitive intelligence service providing daily insights, reports that websites promoting this summer’s movies are succeeding in drawing large numbers of visitors and in routing many of them to various other sites where they can view the trailer, play the game, buy tickets, or buy the soundtrack, DVD and other merchandise.

As the marketing efforts for summer movies heated up, traffic to the Hitwise Entertainment - Movie category also rose, increasing 18% between early May and July 5th. The individual movie site that captured the highest share of visits during the week of the film’s release was The Matrix Reloaded (whatisthematrix.warnerbros.com), followed by Pirates of the Caribbean (pirates.movies.go.com) and Terminator 3 (www.terminator3.com).
Lara Croft, Tomb Raider (www.tombraiderthemovie.com) led all movie sites in sending traffic directly to ticket-buying sites during the week of the film’s release. After visiting the Tomb Raider website, 12.7% of traffic visited the leading movie ticketing sites. Terminator 3 and Legally Blonde 2 (www.legallyblonde2.com) were the next best with 5% and 4.5%, respectively. Moviefone (www.moviefone.com) has been the most popular ticket-buying site with U.S. internet users all spring and summer, with Fandango (www.fandango.com) and Movietickets (www.movietickets.com) rounding out the top 3.

Viewing the trailer online has become an extremely popular activity of movie site visitors, with Apple Trailers (www.apple.com/trailers) by far their favorite site for doing so. Visitors to 28 Days Later (www.28dayslater.com) illustrated this most strikingly – after visiting www.28dayslater.com, a full 68% of visits viewed the film trailer through Apple Trailers.

“Downstream” analysis of The Hulk (www.thehulk.com) reveals a particularly effective merchandising program. During the week of the film’s release, 22.4% of Hulk visitors clicked directly to Hulk Games (www.hulkgames.com), 6.5% to Universal Studios Theme Park (themeparks.universalstudios.com) to learn about the new Hulk Ride, and 5.1% to the Incredible Hulk Television Series DVD site (www.incrediblehulkdvd.com).

“Movie marketers are clearly starting to get the hang of the Internet,” said Chris Maher, General Manager of Hitwise, North America. “They’re harnessing fan passion to both drive sales and build brand.”

The Guardian

Stories of profligate internet companies crashing after the dotcom bust are legion. Tales of those that were created in the immediate aftermath of dot-mania and have not only survived but prospered are rare indeed. Espotting, however, is just such a case. As Concorde rides and the champagne lifestyle of the young bosses of the dotcom-crashers came to an end, ex-schoolmates Daniel Ishag and Sebastian Bishop set up a paid listings internet search company in one room of Ishag's flat in South Kensington.

Amid the turmoil of the online world at that time, the two young entrepreneurs struck gold. This was confirmed when, two and a half years after Espotting's low-key start, it was acquired in June this year by US paid-for search company FindWhat.com in a share-and-cash deal valued at $163m. The company has now moved out of Ishag's flat into an open-plan office in the trendy Brick Lane area of east London.

"From day one it was never a question of failure, it was only a question of how much pain we could take," says Ishag, 30, the older of the two founders by three months. "Or how big we were going to get," adds Bishop, who is the more softly spoken. Ishag intermittently hops up during the interview to take a call or check his computer - always returning and apologising a few minutes later - while Bishop fills out the story of how the two worked together to build Espotting from the ground up. "We never argue, but if there is a disagreement, he's right," says Ishag. "Through years of being friends, I've learned that if Seb pushes back, then he's got a point."

Ishag and Bishop are opposites, and they like it that way. Ishag is the hyperactive one, too busy to sit down for too long. He is also the money man, a natural trader, the guy who came up with the idea for the business and who can charm money out of any investor's pocket. Bishop is taller than Ishag, more thoughtful, talks in considered tones and has been in love with the advertising business since his schooldays.

One thing the two friends do have in common is that on leaving school at 18, they both headed for the world of work instead of university. Bishop moved full time into the ad-agency world at Publicis in France, and later at Rainey Kelly Campbell Roalfe/Young & Rubicam. Ishag, meanwhile, did a series of jobs in a variety of industries with an itinerary of far-flung places, including Indonesia and China, until he settled in Geneva at Hirsch & Cie, a boutique bank co-founded by his brother, where he advised technology companies. Both are natty dressers and have interesting social networks in the UK and continental Europe, which has at times been useful.

It was after completing a few online business-to-business deals at his brother's bank that Ishag thought an online advertising company could work, especially one that was based on the technology used by search engines like Google. Ishag knew that, with his banking brother's help, he could raise the money for the new business, but realised he knew nothing about advertising. "I was a suit and that's what I knew, and that alone wouldn't have worked," he recalls.

A skiing vacation in Europe with Bishop was the venue for a decision by the old roommates to join forces and launch Espotting together. In February 2000 the company was born, and the website came online six months later. At the time, it seemed in many ways to be the worst possible time to start any online business, let alone one centred on advertising. However, the timing proved to be perfect; and the two men respect each other's personalities, getting along so well that they even share an office. "It is very rare that Dan and I tread on each other's toes," says Bishop, whose skills are marketing, advertisers, and website design.

Faith and family were among the keys to its success. The seed money was delivered by Ishag and his brother. Ishag and Bishop then raised cash from 40 friends and family members, investing from £10,000 to £50,000. The duo were determined to repay their investors' faith.

Institutional investment came a year after their site launched. The founders won't say how much money has been invested, but it was likely less than $25m. "They funded this business as they went along and in a very hostile funding environment. I have to give them credit for that," says Bertrand Lipworth, a venture capitalist and personal investor in Espotting.

The faith in the business has been shared by the rest of the Espotting team, who have sometimes gone weeks without salary, yet stayed the course largely because of an unusual esprit de corps built around the original 10 employees (all of whom still work at the company) as well as plenty of fellow ex-Highgate school chums.

After the startup money was raised, Ishag concentrated on business development, although in the early days he worked the phones alongside the rest of the original sales team. "I remember we would call 60 advertisers a day each," says Ishag. "The first 2,000 or so advertisers were brought in this way." There were some tough early times, such as the day Bishop had to visit 20 people at Orange before the mobile-phone company placed its first advertising order in August 2000. "We educated a lot of customers and ad agencies about this business," recalls Bishop. In June, at the time of the deal with FindWhat, Espotting boasted 16,000 advertisers and had operations in 10 European countries.

One of the things that clinched the company's success is the speed at which Espotting was able to roll out its European offices and meet with key local players, in many cases faster than its biggest competitor, the paid-listing company Overture. Espotting owes part of its success to having the right connections. The Italian Espotting office, for example, is headed by Bishop's friend Rocco Benetton, part of the fashion-house family.

Another key is that the paid-for search ad system is performance-related. Customers only pay the search company if they get a "qualified lead", that is, a click from the ad to their own site.

"For tough chief financial officers of companies that were running out of advertising budgets, paid-for listing was the perfect advertising medium because they only pay us when we deliver them business," says Bishop.

It's a business that has certainly proved its worth. Paid-for search is as successful as anything on the web. The deal between FindWhat and Espotting was followed in July by the $1.6bn purchase of independent paid-for search provider Overture by super-portal Yahoo.

FindWhat's acquisition of Espot ting is good for both parties. Neither previously had a presence on the other side of the Atlantic, and both are independent, ie they provide paid-for listings to other sites rather than run their own search site, as Google does. Their ongoing strategies are also pretty close - to chase money from mid-tier online operations such as travel, food and destination sites, roll out turnkey paid-for listings services to big portal sites, launch new products and, in time, create a presence in Asia.

To do all that well will require more of the teamwork that has been Espotting's signature since the start. As part of the deal with FindWhat, all 178 Espotting employees will receive shares or share options. Ishag will become vice-chairman of the combined company, while Bishop will be chief commercial officer. Both will be on the board.

"Technically, this is an acquisition but we call it a merger because we want every single part of Espotting to stay intact and to continue to grow," says FindWhat's CEO, Craig Pisaris-Henderson, who has known Bishop and Ishag since 2000. The financial clout of FindWhat will help the merged company to take the next steps and quell any market concerns about Espotting's longer-term financial stability. "Amateur hour is now over in terms of financial questions or corporate procedures," says Pisaris-Henderson. "What these guys have shown is the tenacity to build the business and the intelligence to bring in the right people in the key positions. Now it is time to take it to another level."

FindWhat's stock price has risen since the deal with Espotting was announced from $13.50 to around $20, but the market is also aware that the newly enlarged company, which is now the largest independent paid-for listings firm, is now a prime target to be swallowed up itself. Portals such as MSN or AOL may want to do what Yahoo has done with Overture and buy in their own paid-for listings provider.

Pisaris-Henderson thinks that adding Bishop and Ishag's European nous will be an excellent addition to the merged company. He says the three of them are already finishing each other's sentences and that they all have the same vision about how to grow. But Pisaris-Henderson, who is 33, admits that the two Europeans are way ahead of him in one particular area. "They are a lot cooler than me. We call it SOA - standard operating attire - and it's about the way they dress, which is really cool," says FindWhat's CEO, feigning a slight sigh of regret.