DoubleClick Looks to Lead Germany by 2001

HAMBURG, Germany – DoubleClick Deutschland expects to be the market leader in this country by 2001 and already claims a 10 to 11 percent share of Europe’s richest market after just 15 months in business here.

“We have 36 Web sites which we market exclusively in Germany and that amounts to 100 million page impressions,” said Arndt Groth, CEO of DoubleClick Deutschland.

Most of the sites are German, mostly high tech and financial services. Online banking has grown rapidly thanks to the phone company’s T-Online service with 3.4 million subscribers.

About a quarter of DoubleClick’s German business comes from financial services and 20 percent from technology “and the rest is spread around, but that’s where we expect most of our future growth to come from.”

Groth estimates that 60 to 70 percent of Internet users access the Web at work, although he believes that the next set of figures will show the ratio at break-even fifty-fifty with even a small tilt to private users.

That tilt is one key to future growth of selling big bucks online advertising. “The only way I can attract Procter & Gamble, Henkel, IBM, Compaq and other giant consumer brands is by having private users.

“Then I can say to them that German households with Internet access are X million so why don’t you do your ads with us. Right now they are holding back but we will get to the point where they’ll free up the necessary funds.”

Unlike the US parent, DoubleClick Deutschland does 90 percent of its business with media agencies because companies spend budgets through them. “We can only do it ourselves if the money comes from a PR budget but once it reaches six figures the agencies take over.

“Remember that we are not an agency,” he said. “We don’t do Web design or media planning. We are the middle man into the Web site. We’re good at Internet advertising but not good at content.”

The company has a sales network spread across Germany with each representative responsible for handling about 20 agencies and their clients. Inside sales are done through a call center in Dublin.

“We’ve just launched a pan-European facility to handle small accounts of a few thousand marks or to deal with people who don’t want any contact with our reps. They say it’s okay to call but God help you if you visit us. For them Dublin is ideal.”

Groth started the business in Hamburg because it is Germany’s media capital and home to most of its multimedia agencies. “But I knew from the start that given Germany’s crazy geography we would need two or three other sites.”

Major cities have different profiles, he explained. Duesseldorf is a telecom center and has the largest concentration of traditional agencies with a growing number of online media planners on staff.

Munich is rich in hardware and software companies and a good place from which to conduct business in Austria and Switzerland. Duesseldorf and Munich offices, accordingly, were opened in 1998.

Frankfurt, the country’s financial center, opened up for DoubleClick when the company acquired NetGravity which had offices nearby. “That gave us a complete north-south axis.”

He described the growth of online sales volume in Germany as “frantic.” It was 17 million Deutschmarks in 1997 (then worth about $10 million) and DM 50 million last year.

“We’re looking for DM 150 million ($78.9 million at today’s far higher dollar exchange rate) this year.” The industry should hit sales of at least DM 400 million in 2000, although Groth does not rule out DM 450 or even DM 500 million.

“We’re under incredible pressure. We have to grow more quickly than our competition and we have to be a lot better.”

Growth does not seem to be a problem. Every week Groth gets 10 queries from sites who want DoubleClick to market them, often sites that don’t exist yet and can only offer a business plan.

The company started from scratch in Germany with Groth alone in an office trying to establish a firm nobody knew. “Oh people had heard of it but they thought it was a high-tech company, not a marketer. Even the trade press didn’t know us.”

Staff age helped. “We’re older in Germany,” Groth, all of 34, said, “because when we finish our studies we’re older than the Americans – 26 to 28 while they are 23 or 24. On average our staff ranges from 27 to 33 and it has a lot of experience.” n

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