24/7 Europe Cuts Client Roster, Reports 'Robust Year'
"We have too many clients and are cutting back to offer better service to those we retain," said Gordon Simpson, CEO of Amsterdam-based 24/7 Europe. The move, he insisted, had nothing to do with the U.S. dot-com downturn.
The parent company in New York announced last month that it would take a substantial charge against its bottom line as a result of slower online advertising spending. It expects to lose $150 million in the fourth quarter.
"Europe has not seen a U.S.-style downturn, because dot-coms here have not been buying eyeballs to reach as many users as possible," Simpson said. Nor were IPOs a factor in Europe as they were in the United States, he said.
"We can count the number of IPOs on the finger of one hand," he said. "These companies aren't gone. They were never there.
"The European reality," Simpson said, "is that the marketplace has clearly stated that very targeted ads are what clients want to buy rather than an ad that defines a network type of operation.
"So we are now reaching an audience advertisers want -- targets within Web sites and groups of Web sites. We are getting higher [cost-per-thousand rates] for sites we represent. This has been an evolutionary process where we have seen the evidence that targeting is crucial for our European business.
"I think the future of online advertising lies in the traditional mainstream brands like those we have now -- Northwood, Uniliver, some of Procter & Gamble's brands, Coke and the airlines.
"The Web is simply another choice advertisers can make, and we are keenly promoting mainstream advertising use of the Web wherever we can find them, and we are applying the same principle to our e-mail operation in Europe."
He noted, however, that the company rolled out its e-mail campaign only nine months ago in two markets, "but we are seeing the newsletter publishers we work with choosing the same criteria as in the main Web business."