Neopets invents world to showcase different forum for Internet ads. (The Internet's Next Wave--Staking Out a Spot).

DOUG Dohring has turned a goofy Web site called Neopets.com into an international phenomenon - and claims he's making a pretty penny, as well.

Dohring, who founded market research firm The Dohring Co., has coined a new term for his business model: immersive advertising. By creating games for clients and extensive product placement throughout Neopia (a virtual world where virtual pets live and can be adopted and nurtured by users of the site), Neopets has been able to attract business from Nestle, Procter & Gamble Co., Mattel Inc. and Walt Disney Co.

Dohring, who would not reveal revenue or earnings data, bought the Neopets' site from Adam Powell and Donna Williams, two Brits living in Southern California who had created the site in 1999. It was merely a game site with no advertising.

Dohring anticipated that companies soon would be looking for a way to advertise on the Internet because pop-up ads were beginning to lose their effectiveness. He believed that immersive advertising was the answer.

"We felt the site had great potential," Dohring said. "With all the Internet models we had looked at, it had the broadest universal appeal. It was very sticky from the beginning."

Glendale-based Neopets.com is largely attracting kids who visit the site for as much as five hours each month to adopt and nurture virtual pets from species with names such as Krawk, JubJub, Quiggle and Tuskaninny.

Ken Bunt, vice president of new media at Buena Vista Music Group, Disney's recorded music division, came across Neopets.com while searching for new places to advertise on the Internet. He's been involved with the site for longer than a year and considers it a hidden gem.

For example, Bunt said he is certain Hollywood Records' Neopia store, where teen rapper Lil',J was promoted, is responsible for the quick start of his debut release. "I have to think it helped because he's had limited video airplay and limited radio airplay," Bunt said.

Bunt says the Neopia store is getting between 70,000 and 30,000 visitors each day. Among those visitors, 5 percent are clicking to one of two sites promoted at Neopets.com. That's unheard of success, Bunt said, as banner ads average a 0.5-percent click-through rate.

Dohring recently launched Neopets Asia and a line of merchandise in 468 Limited Too stores. He also has a contract with Viacom Consumer Products to market the publishing rights to Neopia for book, video game and movie and television deals.