FOCUSING ON AD RESULTS SYNERGY VENTURES KEEPING AN EYE ON PERFORMANCE.

Byline: Jason Z. Cohen Staff Writer

ENCINO - Even in the new economy, where e-commerce is king and profits aren't necessarily a requirement, you can't stay in business if no one knows you're there.

That's why there are people like Stan Burns and Gary Guseinov.

They started Synergy Ventures a year ago as the combination of a media consulting firm and an Internet service provider. Synergy offers advertising services across a broad range of media: the Internet, print, television and radio.

``Good things are really coming into place for us,'' Burns said.

The company started a year ago with four employees and in its first year had $1 million in revenues, Burns said. Now, the company has 16 employees and ambitious growth plans.

``Our goal is to grow into a $100 million company by the end of 2002,'' he said. ``After a year of hard work, we're really starting to see the fruits of our labor.''

Synergy is plucking its fruits from the top of the tree, securing as customers such companies as Lucent Technologies, Washington Mutual and Pacific Bell.

The company differs from the Internet's main advertising companies in its approach. While other online advertising services strive for more eyeballs - people viewing their client's banner ad - Synergy's focus is results.

The company is building areas on its Web site where clients can track the performance of their ads and adjust their advertising mix accordingly.

And Synergy is on to something, according to projections from Forrester Research, a Cambridge, Mass.-based Internet research firm.

``By 2003, our projection is that online advertising in the U.S. will be about $22 billion,'' said Jim Nail, Forrester's online advertising analyst. ``Half of that revenue will be based on performance.''

Initially, Web advertising consisted of little more than placing banners on high-traffic sites, but the business has gained sophistication in its ability to track users.

Sometimes, Web advertising tracks a little too much. Advertising giant DoubleClick recently has been under fire for its methods of tracking users' Internet use in order to target advertising to their interests.

The service does so by reading a computer's cookie files - small data packets a site leaves on a user's computer that identify the user at subsequent visits.

Synergy does not read users' cookies, Burns said. Rather, it tracks where a user visiting the client's site came from, how much time the user spends on the advertiser's site and, more importantly, how much money the user spends.

``In the old world model the site would charge a flat $20 per 1000 (visits). Neat and clean and that's it,'' Nail said. ``The Internet is interactive, so services like these guys are building let you track how many people actually click through on the ad.''

Now, there are various payment models, ranging from giving the site that carries an ad a percentage of the purchase to paying a higher rate for users who follow the banner ad to the advertiser's site.

Other competitors already have begun to move into the space, Nail said.

Firms such as Ad Knowledge, Match Logic and Avenue A already have built their own interactive systems affording customers the ability to tweak their advertising. Traditional advertising agencies also are beginning to move online, he said

``At this stage in the development of the Internet, they're up against some pretty formidable barriers,'' Nail said. ``While Madison Avenue has been kind of asleep at the switch with regard to the Internet, they're starting to wake up. It's going to be very hard for a little guy to start up unless they've got something very special.''

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2 photos

Photo:

(1 -- color) no caption (Stan Burns)

(2 -- color) A laptop shows an overview of Synergy Ventures' advertising services as the chief executive officer, Stan Burns, explains how the combination media consultant and Internet service provider operates.

Andy Holzman/Staff Photographer