Deal Group Media is the biggest and only true online advertiser on the whole of the London stock exchange. Its business is that of focussing on delivering high returns to its clients from online advertising through all differing sizes of web site and search engines. The massive increase in online advertising means it is at the very leading edge of the growth in the industry.

Just a few raw figures to look at in this industry.

*Internet advertising now accounts for around 4% of all company advertising and is growing as a % of all company advertising, we are only at the very beginning of a Mass market.

*The market is expected to break 500 million by the end of December.

*The market saw a 75% increase in revenues in the first 6 months of 2004, so you can see the growth is really staggering.

*Just take a look at this site and others and see all the adverts and pop ups plastered around, theres a good chance that DGM have a hand in many of these adverts.

*The biggest growth stimulant has to be the growth in online shopping and this should increase the market size for many years to come.


The last results reported were very encoraging indeed and 2005 shold be the year this one really breaks out and shines, here are the main points.

Deal Group Media plc, the online marketing group whose activities include
performance-based advertising and search engine marketing, today announces its
interim results for the six months ended 30 June 2004.

Highlights


Business transformed by merger of The Deal Group and IBNet plc


Combined operations turnover 6.55 million (878,000 by former IBNet plc)*


Pre-tax profit 619,000 (before amortisation of goodwill)


Pre-tax profit 45,000 (623,000 loss by former IBNet plc)*


New blue chip clients being won


Core business achieving record growth month on month


An increasingly positive online marketing outlook


Further progress anticipated in the second half of 2004.

The company as an impressive list of clients.......

: AOL, Autotrader, American Express, BT, B&Q, Cancer
Research, Comet, Coral, Dial-a-phone, easyjet, esure, Halifax, Interflora, John
Lewis, Littlewoods, Ladbrokes, Lloyds TSB, Match, MBNA, MoreThan, Nestle, phones
4U, Tiscali, Virgin Megastore, 888 and many more.


Key growth sectors are: mobile telecommunications, broadband, financial and
automotive, with further growth coming from gaming, travel and retail.


On results Adrian Moss, Chief Executive, said:

'We are delighted with the results now being delivered by the Group and our
promising potential. The foundations put in place following the merger, our
focus on delivering return on investment through measurable online marketing for
advertisers and our industry profile, are proving to be a combination that is
delivering value for clients, shareholders and other stakeholders alike. In a
marketplace that continues to grow and consolidate, we are seeking further
acquisitions to broaden the width of our offering and extend our geographic
reach. We look forward to continued growth.'

The company are making great strides to grow organically and are looking at the very large European market were acquisitions will be made.

Outlook

We anticipate that the second half of 2004 will continue to progress
successfully. Turnover exceeded the 1 million a month landmark for the first
time in 2004 and has consistently remained there. Month-on-month, the
Performance Network channel is enjoying record growth. The online advertising
channel is now establishing itself with regular repeat orders. Search remains a
strong growth opportunity and the newly launched affinity channel shows early
signs of success. Our key channels are growing and we anticipate they will
continue to do so.
With nine months of the new business operating and significantly outperforming
the previous entities, we have a solid base to continue delivering for our
clients and shareholders. We can only repeat the sentiments of our 2003 Annual
Report - we remain confident and excited about the Group's prospects.

Fundies.

Y/Ending 31-12-2004 EPS 0.50p P/E 25.00
Y/Ending 31-12-2005 EPS 0.80p P/E 8.5

So forward P/E of 8.5 is very cheap for an online growth stock.

Alpha/Beta

The beta is on the low side so it wont exactly fly, but all in all it looks a solid growth investment. Certainly not another 'As Seen On Screen' but as per this weeks Investors Chronicle, low beta stock have greatly outperformed high beta stock this past year.

Does it have any minuses, well although not a minus some from the old school would be looking at Intangible assets and amortisation of goodwill but as an healthy profit making company I see no reasons to be negative here.

It is a cyclical industry is advertising but lets face it we are now on the upcurve and more and more businesses are turning to the internet for cheaper advertising solutions.

Conclusion

This looks a solid sound investment and although I wont put a figure on the Sp with its ongoing fantastic growth I would be hoping for a very exciting performance during 2005.

DYOR

Cheers GF.

By the way the chart added as per Dils request.....................

Do you think 20p may be a barrier for now until the results?
What would be a good price to get in at? Opinion only, I know its ultimately my decision. Deciding between two on my list, DMG and KMR, can only do one at moment.

andysmith

Fund managers have been buying recently at these levels if thats anything
to go by....

Up again, wow.

cheers GF.

Yes, unfortunately guys I am going to have to leave you. I have made a nice profit on this one - I have something else to put my money into. If they retrace I may well get some more.

Trdxx,

Do you by any chance hold any DAT group (DA.)??? If so well done, they are flying.

I can empathise with you legend. I too feel very tempted to take profits. DGM has had a great run, and many other investors must feel the same. However, im still optimistic for Deals future, and any set back in the SP can only be temporary. For me DGM is a hold.

Wouldn't disagree with you whatsoever chad, I have another stock to have a go at and should do well.

I am one of the believers that you never lost money taking a profit... what price did you get in at??

Im staying put.

cheers GF.

Interesting article on online advertising -

http://news.bbc.co.uk/2/hi/business/4203805.stm

cheers

Excelent spot S1309..................


Online ads win over the brand leaders
By Alex Kleiderman
BBC News business reporter



Online advertising has come of age with major brands like American Express and Nike now firmly embracing the internet as an equal to more traditional promotional outlets.

Yahoo has said a boom in online advertising helped it to more than double fourth-quarter profits to $187m (143.2m) in the last three months of 2004.

Newspaper groups, meanwhile, seeing a loss of revenue from print advertisements, are expanding their own internet operations as they bid to keep up with demand from marketers in a sector which is growing.

"We saw a complete change of philosophy last year," says Jeff Lanctot, vice president of media at AvenueA/Razorfish, the largest independent online ad agency in the US.

Faced with a multi-channel media landscape and corporate belt tightening, marketing departments began to see online advertising as a cost-effective medium.

With its mass reach, it can now rival other entertainment outlets for audience size, says Mr Lanctot.

"Brand advertisers once considered online an emerging technology they should test but in 2004 they considered it an essential part of their campaigns."

Rise of the portals

Total online spend grew by about 27% last year but still only accounted for 3-4% of US and European company marketing budgets, according to JupiterResearch.



By 2009, JupiterResearch forecasts revenues will have more than doubled to about $16.1bn (8.5bn) in the US and 4.7bn euros (3.2bn) in Europe.

Although growth will slow and overall revenues will remain far below TV and newspapers, online advertising is the only area expected to significantly increase its market share over the next five years.

Financial and travel companies were among the first to start selling products and services on the internet and now spend up to 20% of their advertising budgets online.

Sponsored searches - where firms pay to have links to their websites displayed in response to internet searches - and the bright spot in the years after the dot.com crash for the likes of Google - continues to grow.

And sales of online display or banner advertisements - the largest earner in the sector - generated their first increase in revenue last year since 2000.

It was the major brands advertising on specialist sport sites and the portals like Yahoo, MSN and AOL - where the cost of space can cost $400,000 for a 24-hour placing in the US - that is behind the recent boost.

Busy lives

Marco Bertozzi, commercial director at London-based digital media advisors Zed Media, has seen the number of clients who view the internet as "more than just a direct response channel" increase dramatically over the last two years.


Their online spend accordingly is up by about 400%.

"The shift is primarily being driven by volume," he says. "If the audiences are growing then you will be able to reach people more quickly."

"People are turning to the web for info, entertainment, to save time in a very busy life.


"Online is part of most people's lives now and the uniqueness of it is the fact that advertisers can get far closer to their consumers."

There are now the first signs of internet companies starting to sell ad space as part of a package and insist on minimum spend requirements but Mr Bertozzi believes prices could remain stable as choice allows advertisers to shop around.

Wary consumers

A survey carried out for the European Interactive Advertising Association, a trade organisation for sellers of interactive media, found 83% of online users felt that TV has too much advertising but less than half felt the same about the internet.


There was a confidence as the industry re-established itself on a much more stable footing after the dot.com crash
Julian Smith, JupiterResearch

A third of those surveyed said that online advertising was relevant to them.
"There was a confidence as the industry re-established itself on a much more stable footing after the dot.com crash," says Julian Smith, European online advertising analyst at JupiterResearch.

But Mr Smith envisages challenges ahead as faster internet connections see advertisers vying to create even more creative campaigns.

"As more [advertisers] come online in 2005 and competition intensifies to attract the attention of ever more experienced and wary online consumers, so the costs of online marketing will increase."

Story from BBC NEWS: 31/1/2005.

cheers GF.

I am definitely holding - I think that on-line advertising is only in its infancy with lots to come.

Legend. I was in at 9p, so ive had a more than decent return so far. What about you?

Goldfinger,

Have you seen IBG? how does it compare with DGM?
Both companies have gone crazy over the past few months! The main factor seems to be the increased usage of the net for shopping etc

Any thoughts would be well received.

Looks like Fidelity have picked up a few more shares - their stake is now 5%

I really think this is going to double within 6 months.

MS

Strange activity today. I've heard Comdirect offer no spread 19.13 to buy and sell??

Yup Fidelity getting stuck in and increasing its stake.

cheers GF. IBG will have a look., although Im going through Air Music And Medias accounts and it looks a little gem so far.

Forgot to post this from Fidelity..................

Change in holding since last filing: +3,341,388 ordinary shares.

cheers GF.

GF,

busy busy busy... lol! IBG seem to be in the same boat as DGM, but have yet to release any figures(due out in a few weeks). Take a look and see what you think.

All uphill since september.



cheers GF.

Lots of stock purchase at the moment could this be a similar build up to the mid-march intrims that we are seeing with neteller?