Our Inc 500 Brothers?
We were tremendously pleased to make the Inc 500 this year. I actually hadn’t seen the issue until this weekend and it made for interesting reading.
I was most intrigued by other firms in our category of Advertising and Marketing, where we ranked the 24th fastest growing company.
Now, SEM firms have several choices in how they want to run their business. Most firms actually pay their clients’ media bills and are then reimbursed with some mark-up for management. Some of these firm then choose to show a HUGE top line revenue figure despite the fact that most of that money is “pass-through” to the engines. That can distort the ratio of top line revenue to employee making them look more profitable than reality.
We don’t follow that model, and given the current financial crisis I can’t tell you how glad I am about that :-) Our top line is just management fees and consulting revenue.
What intrigues me is that one of the well-known coupon affiliates also made the list, much higher than us in fact. That’s cool, but the numbers reported by Inc for 2007 were startling: $8 Million in top line revenue, and 8 employees. Now, I understand in the SEM world that maybe they were managing $7 million in advertising, made $1 million in commission on top of that and that $1 million would cover the 8 employees nicely.
However, my hunch is that they’re not spending $7 million in advertising. Clicks on “[brand name] coupon” aren’t that expensive. Indeed, I’m not sure what could account for a revenue/employee number approaching $1 million, other than a really profitable business model.
Anyone else find those numbers remarkable?