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This story appears in the January 1999 issue of . Subscribe »

With the Internet expanding into every nook and cranny of our lives, some advertising agencies are cashing in by offering interactive services to help their clients market online. The interactive services in highest demand today are Web site development, including programming and design; marketing, including media planning and ad banner development and placement; and e-commerce, which typically involves the development of online catalogs through which companies sell their products.

"The Web should be a central component to a company's overall business strategy," says Drew Ianni, online advertising analyst with Jupiter Communications, an IT market research firm in New York City. "Many [advertising agencies] are doing their best to get the skills necessary to do interactive advertising."

If advertising companies do it right, there's a large piece of the pie to be had: Jupiter Communications predicts the online advertising market will grow from $1.9 billion in 1998 to $7.7 billion in 2002.

E-Mail Marketing

P>Different from spamming, e-mail marketing (also called permission marketing) involves renting targeted lists for sending information online.

With e-mail marketing, response time is much faster than with traditional direct marketing-and it's cheaper. "It's done electronically, so the costs are lower," says Keith Pacheco, co-owner of FBK Enterprises, a Greenville, Rhode Island, direct-mail company that specializes in e-mail marketing.

Clients with trendy, timely products and services are prime candidates for e-mail marketing. Pacheco says businesses pitching hardware, software and Internet-related products online, as well as marketers offering unique products, are especially successful.

Internet Commerce

Selling on the Web has its challenges and limitations. Yet entrepreneurs involved in Internet commerce, and particularly those with existing businesses who are using the Web to supplement revenues, are finding it significantly spurs sales.

"One of the biggest benefits of [Internet commerce] for small companies is that time and space go away," says Barry Parr, director of e-commerce strategies for International Data Corp. (IDC), an IT research firm in Framingham, Massachusetts. "You can be available to people 24 hours a day and reach new customers around the world."

Books, music, computer hardware and software, and travel products and services are the hottest sellers online. But if you think adding commerce capabilities to your existing Web site is good enough, think again. "You have to heavily market and promote your [Internet commerce capabilities]," insists Parr.

If you're willing to make the necessary commitment, all indications look good: The number of people with PCs, the percentage of people on the Net, and the amount of money they're spending online all continue to swell. According to IDC, 34 percent of consumers purchased something online in 1998-and that number is expected to jump to a whopping 47 percent by 2002.

Contact Sources

FBK Enterprises, (401) 433-5811,

Jupiter Communications, (212) 780-6060,

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