Nothing but Net

Think banner ads are a failure? Guess again! For one retailer, Internet ads are the fuel for booming success.

Before

Armed with 22 years of marketing expertise, Maurice Nieman noted the splash that book and music retailers were making on the Web. He thought consumers would also welcome a window blind e-tailer. Low inventory costs, lack of a major competitor and his wife's interior design experience made the industry attractive. With Microsoft's FrontPage at his side, Nieman created a Web site, and in May 1998, Blindsgalore.com was born. Keenly aware of his first-mover advantage, Nieman invested heavily in print advertising to fuel fast growth. One small ad in the back of Martha Stewart Living magazine was a staggering $4,000! Although the ads brought in customers, the cost to obtain each new customer was extremely high.

During

Once the Internet bubble burst, Nieman was even more committed to profitability. In a bold move, he halted print ads altogether. Targeted banner ads on search engines became the bulk of his spending. Search "blinds" at a search engine, and Blindsgalore.com banner ads pop up. Even typing in a major supplier like Hunter Douglas brings up the ads. Most important, Blindsgalore.com has blocked competitors by entering into contracts for first refusal on ad space.

After

By September 2001, the company was profitable. This year, Nieman projects more than $10 million in sales for his company--an increase of more than 50 percent from a year ago. Its banner ads' click-through rate ranges from 2.2 percent to 6.5 percent, clearly surpassing the industry standard of 0.5 percent. By narrowly defining and vigorously defending its niche, Blindsgalore.com has defied the market.

Elizabeth J. Goodgold is CEO/chief nuancer of The Nuancing Group, a brand consulting firm in San Diego, and author of the monthly newsletter Duh! Marketing.

This article was originally published in the August 2002 print edition of Entrepreneur with the headline: Nothing but Net.