PLUGGING IN: Promotions.com shows what Internet marketing is all about.

Go ahead and say it: “An Internet-only marketing shop on the promo 100?” It was bound to happen sooner or later – later for the scores of newbie dot-com operations that haven’t been around long enough to qualify for the list. But sooner for Promotions.com, the New York City-based outfit that is quickly making a name for itself – a second name, in fact – among such blue-chip clients as General Mills, Kraft Foods, Compaq Computer, and Autobytel.

Originally called Webstakes (the name of the consumer-destination portal that brought the company its initial attention), Promotions.com debuts on the promo 100 at number 26, thanks to a net-revenue increase of 550 percent to $10.5 million since 1997.

The company’s rise to notoriety has been rapid by offline standards. But by the laws of the Internet, Promotions.com is already long in the tooth: Seeing that marketers would need help driving their brand messages online, ceo Steven Krein and president Dan Feldman borrowed $30,000 from a former employer and opened their first office way back in early 1996.

Promotions.com has undergone some transformations since then. The most significant one came earlier this year, when it undertook the name change to position itself as a marketing partner for brands rather than simply as the operator of consumer-focused Webstakes.com.

The company is now structured into three lines of business: A custom solutions group develops integrated promotions of all shapes and sizes; a direct unit handles opt-in e-mail campaigns, data collection and management, and lead generation; and the well-known Webstakes.com site gives marketers a vehicle for attracting consumers and driving them to Internet promotions without the cost of a custom Web campaign.

The business plan is based on helping clients leverage real-world holdings to make Internet promotions more effective. A recent effort for The Sharper Image used the retailer’s stores and catalogs to drive customers online; an initiative for NBC used the network’s programs to steer viewers to the Web.

“Instead of integrating offline marketing with the Internet, we put together programs that seamlessly integrate Internet promotions with real-world assets,” says Krein. “It’s sort of a backwards approach to what many marketers are used to, but we’ve had tremendous success with it.”

Clients concur. “They offer turn-key promotions, scale nicely, and are knowledgeable about laws and regulations,” says Lee Barstow, vp-business development at Stamford, CT-based World Wrestling Federation. “This is an all-inclusive company.”

The all-inclusive approach has resulted in 90-percent margins corporate-wide. How? Promotions.com leverages clients, consumers, and knowledge across all three lines of business. Example: A promotion can be created by the custom solutions unit, jump-started on Webstakes.com, analyzed with lead-generating data, and advanced through opt-in e-mails designed to convert consumers into customers. The whole effort, including fulfillment, can be powered by Promotions.com’s proprietary back-end.

Although most (89 percent in 1999) of the company’s revenues are still coming through Webstakes, Promotions.com’s custom solutions group is making solid gains. The group is led by vp-integrated promotions Chris Bragas, an agency veteran who manages a staff of 25 Net-savvy marketers – or “partners,” as all 160 employees in the title-less company are called – who spin innovative promotions for a growing number of brands.

The group strategizes with clients, helping them understand the whys and hows of Internet marketing. One upcoming effort involves a NASCAR tie-in for General Mills’ Pop Secret line that will draw consumers from state fairs onto the Internet.

While many brand manufacturers are tuning into Promotions.com’s new signal, some marketing services companies are unsure of exactly what the shop does – or feel threatened by what they do know. But Krein says his outfit is already partnering with a handful of marketing agencies, and wants to forge a lot more of those relationships in the future. “We don’t want [promotion agencies] to fear us. We want them to embrace us,” he says. “We’re here for both them and their clients.”

What’s next? A lot more. Promotions.com is going global, with plans to invade Asia, Latin America, Europe, and Australia ready to roll. New services such as loyalty programs and event sponsorship coordination will soon be available. Acquisitions are also on the horizon.

Knowing Promotions.com, expect it all to happen sooner rather than later.