Prospectus Summary
You should read the following summary together with the more detailed information regarding Avenue A and the common stock being sold in this offering and the consolidated financial statements and related notes appearing elsewhere in this prospectus.
Avenue A is a leading provider of Internet advertising services. We integrate strategic Internet media planning and buying, proprietary ad management technology, user profiling and data analysis systems to help advertisers increase the effectiveness and return on investment of their Internet advertising campaigns. Through this integrated approach we have developed an extensive knowledge base of Internet advertising strategies, targeting methods and media placements that perform effectively. We believe this knowledge base grows richer and more valuable with each additional campaign we execute and with each additional client we serve. We focus on serving the needs of buyers of Internet advertising, providing a service that harnesses the complexity, interactivity and dynamic nature of the Internet with the objective of delivering the most successful advertising campaigns for our clients. Our revenue has grown to $20.3 million in the third quarter of 1999. Our top clients include Gateway, Microsoft, uBid and Uproar, based on revenue in this same period.
The Internet has become an important medium for advertising and commerce. Forrester Research, Inc. projects that online advertising expenditures in the United States will grow from $2.8 billion in 1999 to $22.0 billion in 2004. We believe this growth is driven by a number of factors, including the increasing number of Internet users, the growth of e-commerce and advances in online advertising technology. Unlike traditional media, the Internet enables the delivery of dynamic advertisements which can be tailored for individual viewers and quickly modified based on their response to the advertisements. Advertisers, however, often must overcome significant challenges to take full advantage of the Internet's potential as an advertising medium. Some of these challenges include the scale and complexity of the Internet, significant data analysis and technology requirements, substantial operating costs and the limited number of service providers focused specifically on the needs of buyers of Internet advertising.
Avenue A seeks to provide a solution to these challenges. We have designed our service offering to meet the needs of buyers of Internet advertising. Our media planning and ad management services use our database to create and execute highly targeted advertising campaigns. Our scalable proprietary technology allows us to simultaneously conduct a large number of advertising campaigns which are delivered to a broad range of Web sites and advertising networks. Our technology and data analysis systems measure and analyze our clients' advertising campaigns based on criteria relevant to their specific business objectives to help increase the return on their investments.
Our objective is to be the leading provider of Internet and other digital media advertising services to advertisers. To achieve this goal we plan to:
. aggressively acquire new clients and develop new markets, in particular through our Growth Markets Division, which tailors our services to clients with smaller online advertising budgets;
. leverage our extensive database of information from prior Internet advertising campaigns and our data analysis expertise to improve and extend our services;
. provide superior client service through a comprehensive, integrated offering of Internet advertising and marketing services, including our recently launched Precision Email Service;
. continue to build, license and acquire technologies that will enable us to plan and execute increasingly effective Internet advertising and marketing campaigns;
. acquire complementary businesses and establish strategic relationships with other companies, including companies that provide traditional advertising and media services;
. exploit emerging digital media opportunities such as interactive television, Internet-enabled home appliances, hand-held computers and cellular telephones; and . expand our presence internationally in order to capitalize on the global reach of the Internet.
We began operations in July 1997 and were incorporated in Washington in February 1998. To expand our presence in the Internet advertising industry and allow us to serve a broader client base, we acquired iballs LLC, an Internet media company located in New York City, in September 1999. Our principal executive offices are located at 506 Second Avenue, Seattle, Washington 98104, and our telephone number is (206) 521-8800. Our World Wide Web site is www.avenuea.com. The information contained on our Web site is not part of, or incorporated by reference into, this prospectus.
"AVENUE A," "AVENUE A MEDIA," "AD CLUB NETWORK," "AXIS," "PRECISION E-MAIL," "PRECISION TARGETING" and the Avenue A logo are service marks of Avenue A for which service mark applications are pending. "IBALLS" and the iballs LLC logo are service marks of iballs LLC, a wholly owned subsidiary of Avenue A, for which service mark applications are pending. This prospectus also includes trademarks, trade names and service marks of other companies. Use or display by Avenue A of other parties' trademarks, trade names or service marks is not intended to and does not imply a relationship with, or endorsement or sponsorship of Avenue A by, these other parties.
Unless the context requires otherwise, in this prospectus, the terms "Avenue A," "we," "us" and "our" refer to Avenue A, Inc. and its subsidiaries, and references to "iballs LLC" refer to I-Balls LLC, a wholly owned subsidiary of Avenue A, Inc.