Digital River discusses web analytics and online marketing

Includes: DRIV-OLD, WSSI
by: David Jackson

Digital River provides e-commerce platforms and marketing for software companies. After its strong Q4 earnings report, the company's conference call focused on revenue growth, international expansion, financial leverage and the threat to its anti-virus customers from Microsoft's entry into the security software market.

Digital River is moving deeper into providing Web analytics and online marketing for its customers. Of all the topics it discussed, DRIV's comments about analytics and online marketing had the most relevance to the entire Internet sector. Here they are:

Digital River's CEO was asked what really drove the upside to its Q4 numbers. His answer:

…it's really been effectively across the board. …We've seen tremendous growth from all of our clients… tremendous buy-in on those strategic marketing programs… we've hired in a team of kind of crack professionals that that's all they do is manage these programs.

Search engine and affiliate, in particular, those two areas are just exploding for us. And so we're having a lot of success in categories that we found to be really under-optimized, way under-optimized. …we're seeing programs where some of our clients were seeing 2-to-1 returns on their investment and we’re delivering between 10 to 1 and 13 to 1 returns on those investments.

Our clients are seeing our ability to drive their revenues more and more from... the analytical side; where we're able to walk in and show them just actual base numbers about how we can increase close ratios 10 to 20% and increase average order values significantly.

…a lot of these large companies are now coming in and saying, "it looks to us like you are the only logical place to go"… they're actually giving us entire budgets and saying, “just go and do it