October - 2001 - issue > Cover

Think of how many times you’ve actually clicked on a banner ad or online marketing campaign. For many Internet users, that number can easily be counted on one hand. Companies like Yahoo!, built on the promise of Internet advertising, have felt the brunt of the bursting of the Internet bubble, as Internet marketers have either gone out of business, or stopped advertising online. The general feeling is that ads on the Web just aren’t as effective as people thought they would be.
But Hitendra Wadhwa still has faith in the Internet as a marketing medium — particularly for direct response campaigns, which he characterizes as “showing healthy trends.” Paramark, the company he founded in 1999, provides an ASP product that uses algorithms to automatically determine which elements of an online marketing campaign are working and which aren’t. It’s the same job marketers do by hand today, when they review the numbers for their campaigns and adjust accordingly, but Paramark’s software reviews the numbers automatically, and makes changes on the fly, eliminating poorly performing ads. The software can be tailored to Web site optimization and e-mail marketing as well. In each case, the approach is a kind of hands off, intelligent marketing, relying on artificial intelligence in the product.

It’s an impressive application, but can you build a viable business around it as the online marketing market collapses?

Wadhwa characterizes the product as entirely RoI-driven for his customers. He does a demo for potential buyers, where they try out the software to see if it really works. It sounds like something out of an infomercial, but Wadhwa assures that his application not only works, it provides an easy, financially-driven value proposition for buyers.

Paramark is chasing Fortune 500 customers, particularly those, like credit card firms and large high tech vendors, that spend upwards of $30 million yearly on online marketing. His last deal, he reveals, was for $500,000 (representing a gain for the customer of at least 3 times that number he claims). Paramark’s objective is to get customers to commit to larger deals. Customers Coke and Gatorade are a start, but many more deals will need to be struck for Paramark to find success and profitability. The company, which has roughly 30 employees, does not expect to raise money for several quarters.

Will online marketing really work in the long run? Wadhwa challenges that it will at lest provide him a solid market opportunity. He argues that though most people hang up on telemarketers, telemarketing is still a $60 billion industry. Paramark is also looking to build some products for the telemarketing space — primarily for script optimization.

Still the company has a long way to go. Wadhwa wants to partner with companies like DoubleClick or with CRM vendors like SAP. He hopes they will look to Paramark instead of developing similar solutions in-house. Either way, Paramark will need to acquire more large paying customers.

It’s a difficult time to be anywhere within the online marketing space. The proof for this interesting product will be in the numbers.

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