Multi-Channel Approach Pays Off for Alloy
The company's total revenue was $42.5 million for the quarter, up 151 percent over last year. Fourth-quarter profits were $24.5 million, up from $10.5 million in the comparable period last year.
"We have a business model, an integrated convergence model, with all these different assets that work well together," Alloy chairman/CEO Matt Diamond said. "And as each of them grows, they play off each other and become effective ways of reaching the demographic, both from an advertising perspective and a way for us to sell products."
Alloy, New York, delivers products and content aimed at teen-agers through its Web site, catalogs and e-zine.
"The driver of revenue for us is the assets themselves," Diamond said. "The catalogs drive traffic to our Web site and generate revenue as well, not to mention the revenue generated from the Web traffic."
The catalogs list the company's Web site, www.alloy.com, at the bottom of every other page, for example, and the site offers visitors free catalogs.
Nearly half of all sales are online, up from 10 percent two years ago. Diamond doesn't see that percentage changing much over the next few years.
"And we prefer it that way because the two [online and catalogs] work well together," he said. "The Internet is a great medium, but it's no more the death of catalogs than television was the death of radio."
The rise in visitors has helped Alloy increase its database over the past year from 3.8 million names to 6.5 million. There are 3.7 million registered users online, and "several hundred thousand" of those have bought products, he said. Overall, 1.5 million of the 6.5 million names in its database have bought products.
Additionally, Diamond said, the larger database is more attractive to advertisers trying to reach the teen market.