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Example research essay topic: Sales And Marketing Operating Expenses - 1,744 words

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The business world has continued to grow over the past century, although only recently has a new market for business arrived. This new market is able to reach billions of people around the world at a click of a button. This business opportunity has emerged in the World Wide Web. Many companies have successfully tapped this resource and have made millions upon millions of dollars off of distributing services or goods to the billions of people that log on everyday.

DoubleClick has in recent years become the leading provider of tech-driven marketing and advertising solutions. DoubleClick provides a broad range of services though different departments. Through these various departments, DoubleClick optimizes revenues for customers by using its patented DART technology. The DART technology is designed to enhance the effectiveness of DoubleClick ads and marketing campaigns.

The patented DART technology is the newest form of Internet advertising. Using a database which contains stored information on millions of web users, the DART technology is applied strategically. When a user logs onto a site they are examined by Double Clicks technology, and an advertisement which suits there age, location, or life style is placed in the banner. This allows companies and advertisers a better chance at pinpointing potential customers.

DoubleClick has only recently emerged as a competitor in this market for Internet advertising. The Internet although is being seen as an attractive new medium for advertisers due to its rapid growth in number of users. The amount of time these users spend on the web is also increasing at a dramatic amount. With the increasing market of Internet advertising growing at this pace, it is estimated approximately 33 % of advertising will be via Internet by 2004.

This could leave DoubleClick in a position to capitalize on this large market opportunity. The operations are one of the major functions of a company. It entails manufacturing, production, and overseeing that goods or services are done properly and are given to the customer. In the case of DoubleClick, the operations mainly incur the sales and marketing due to its service-related industry, as well as administrative jobs and product development. The marketing expenses for DoubleClick exceeded 37. 9 % of the companys revenues for 1998, only a slight increases over the 1997 numbers. The administrative expenses were 14 % of revenues for 1998 and were considerably lower than 1997 s numbers of 17. 6 %.

The product development involved mainly the production of technologies and improving previous DART technologies. The expenses incurred in the development were a small 8. 8 % of revenues of 1998. The increase of 1. 3 % over last years numbers was due primarily to an increase in product development in addition to an overall expansion of the companys services. DoubleClick believes in a continued development of technology in attaining new strategic ways to place advertisements and achieve the most efficient results as possible. The net loss due to operations was 15 million up from 3. 8 million in 1997. This was due to a huge hiring of additional personnel, and an increase in sales and marketing and product development as a whole.

The market for Internet advertising and related products and services is intensely competitive. Double Clicks strategies have been very successful to this point. Their sales organization is divided into groups that separately sell their services and product offerings. DoubleClick uses many methods including public relations, advertisements both online as well as printed to sell products. Sales and marketing expenses are the bulk of Double Clicks costs. Including salaries, commissions, and many other operations they consisted of 40? % Of revenues for 1999.

These expenses have been increasing over the years due to major expansions in international operations. Due to DoubleClick major relationship in providing services to customers, marketing is key to their organization. Also due to their new arrival in the business world it is important for their company to place large expenditures into creating, distributing services, and promoting their goods that they have. It is also important that their marketing creates the proper utility of place, time, and form.

Utility means that it satisfies the customer and as long as their DART technology works to customers needs, then the company will be successful. The current problem within the company is that the DART technology is under fire, for is use of private information to distribute advertisements to users of web sites. The market for interactive marketing solutions is very competitive, and DoubleClick is aware of this. It is expected that the competition will continue to increase as years go on, and the Internet becomes more widely used. Due to the low barriers to entry in this market, a company with only a slight amount of capital could easily turn into a competitor very quickly. It is anticipated that DoubleClick will be able to compete as long as a number of factors remain in place.

That is they continue to increase there marketing activities in finding new solutions and enhancements to previous solutions of advertisements. The use of performance in the company, as well as pricing, is something that must be considered in the future, as well when attempting to compete. Currently DoubleClick media competes for Internet advertising revenues with many largely established web users. Some of these users include America Online, Excite @ Home, Microsoft, Go.

com, and Yahoo. These are just Internet providers that bring competition, not to mention the millions of television, radio, and print advertisers in the market. It is obvious that DoubleClick is not alone in a world that is driven by major methods and technologies DoubleClick could succeed, although no one is sure what the future might hold. DoubleClick has been expanding its operations for sometime and due to this has lost much money. To examine Double Clicks financial statues we must first look at where their revenues are derived from. DoubleClick primarily gets its revenues from the sale and delivery of advertising through third-party web sites.

The company is divided into three branches. These include a DoubleClick Media department, a DoubleClick Techsolutions, and DoubleClick Data Services. The DoubleClick Media department creates the most revenue of the company by offering their main services of advertising and marketing solutions. The Techsolutions is the second highest revenue-gaining sector of the company. Comprised of comprehensive service, and software solutions, they help to target advertisers and customers. The Data Services are a leading provider of information products and marketing research that help to allow the company as a whole direct their marketing services.

They use this sector also to create databases to model their technology within to target customers. DoubleClick is currently in trouble financially. Although the company has shown progress in improving its current assets or in other words actual cash it is still seeing red ink. The companies actual cash did decrease over the past year from 161. 690 millions to 119. 238 millions, although investments and marketable securities skyrocketed. This means primarily that the company is using its stock to help finance the companies continued existence as well as growth. Large account receivables are also due to the company form customers.

In the balance sheet this company can be seen as a very unstable company, with little to show in the form of property and equipment. Much of the money of the company is making its way into intangible assets such as operations like marketing, sales, wages and so on. Even though the company has shown improved total assets they are still accumulating a deficit. This past year they nearly doubled there accumulated deficit from 54. 010 millions in 1998 to 109. 831 millions in 1999. The income statement only shows more poor news for DoubleClick. Despite the rise in revenues and a tripling of gross profit, the net loss is still astounding.

The increase in revenues is due to the astounding amount of advertisements than was able to provide in the past year. Creating deals with numbers of large companies such as Altavista and Disney as well as small companies they provided services to millions of new customers. The companies net loss of 55. 821 millions over last years 18. 039 millions primarily is from their total operating expenses. The operating expenses doubled this year due to a huge increase in the company at home and abroad. This was all due to the need for growth and expansion in the company. In total the operating expenses increased from 84. 503 million to 209. 853 million in one year.

DoubleClick has a history although of losses and estimates continued losses in the future. They have not achieved profitability and expect to incur continued deficits in earnings. In order to achieve earnings and maintain profitability, the company must increase revenues by sales of advertisements. Even though revenues have grown in recent quarters the company is still at a point of instability and may not be able to maintain a profit.

A major reason why revenues may not be up to anticipated par is due to possible regulations impending on the DART technology in the revenues of the company, DoubleClick may be loosing many services that it can provide. Even though DoubleClick is currently in financial problems, financial analysts still see the company as having potential. Currently the company is looking to see profits by the year 2003. Even if this profit is made, it is difficult to presume that they will be able to maintain it long enough to also attempt to pay off its current debts.

Still the Internet is seen as a highway to the future, and if DoubleClick rides it long enough it could see major profits up ahead. DoubleClick is a fairly new company in the Internet Business world. Looking at its current standings we must also look at how long it has been around, and how well established it really is. For a Company that is only four years old, DoubleClick is not in bad standing. They have shown the ability to create a large revenue for themselves, even though there expenditures outweigh them. The company has seen many troubles in the past years, including the number of lawsuits that have been filed against it.

In the future DoubleClick does have the potential to be a very successful company. For the present DoubleClick is in trouble with financial matter and much more. Unless something happens to pull the company together and create a higher level of revenues, the company could be seeing problems. Bibliography:


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