Also in this report:

* Agencies get closer to clients, each other: Video conferencing, Internet, Intranets and Extranets are among the tools being used to bridge the communications gap p.18

* Valu-net banks on virtual mall: Company positioned as one-stop shop for all the needs of prospective on-line retailers p.23

* Jockey Club goes after tech-savvy crowd p.24

* Salesforce automation requires careful planning p.25

You’ve finally got a handle on the Internet. You think you understand what an Intranet is. Now, get ready for the wonderful world of Extranets.

It’s technology that can simplify communication between a company and its suppliers, distributors or franchisees, distilling processes that once took days down to just minutes. And a new Toronto-based company called Drums is busily developing sales and marketing applications for it.

An Extranet is a communications network connecting a limited group of companies. In this, it differs from the Internet, which is accessible to anyone, or an Intranet, which connects users within a single organization.

Drew Williams, chief operating officer of Drums, says his company is working now with more than 30 different clients in sectors ranging from mutual funds and consumer electronics to the communications industry.

The companies embracing the technology, he says, are innovators that don’t mind sticking out their necks a little.

The Extranet sites that Drums is building for clients allow a company’s dealers or franchisees to choose and customize co-op advertising, order pos material and perform other tasks such as sales forecasting. The sites are designed with control panel-style screens, featuring buttons and tabs for easy navigation.

In addition to building the front end for clients, Drums also takes care of the back-end functions. It runs a fulfilment centre that distributes the pos material, sends completed ads and insertion orders to newspapers, and handles payment for the advertising.

The company also has a content management centre to keep sites up to date, and a reporting arm that performs such functions as on-line satisfaction surveys.

Williams says the technology’s key benefits to clients include improved communications with the channel and, ultimately, enhanced relationships with channel members, as well as cost savings and enhanced sales.

Given the background of its principals, it was perhaps inevitable that Drums would attempt to take Extranet technology into the realms of sales, marketing and advertising.

Both Williams and Brian Walters, ceo, have had lengthy careers in marketing, as well as experience with new technology.

Before launching Drums, Williams was vice-president of marketing at Rogers Communications, where he was instrumental in the launch of the Rogers Wave cable modem. Prior to that, he spent five years at CTV Television Network as director of marketing and research.

Walters was a senior vice-president at Classicomm, prior to its takeover by Shaw Communications and was most recently vice-president, PC/Interactive Services at Shaw, where he spearheaded introduction of that company’s Internet and cable modem services.

Tom Blackmore and Bill Sharpe, the principals of Toronto agency Sharpe Blackmore, are also silent partners in the business, and were responsible for planting the seed that grew into Drums.

Sharpe Blackmore has worked with Xerox Canada for about 10 years, and for the last five has been managing that company’s co-op advertising program. Discussions about ways of automating the co-op system led to formation of the new company.

The Extranet system that Drums created for Xerox allows for a more consistent advertising product, and is fast and easy for Xerox’s 150 Canadian dealers to use.

A Xerox dealer can log on to the site to review print advertising for a specific product or program, customize the ad by changing copy and adding its own logo, and then book the ad – all on-line.

The ad is printed out camera-ready at the fulfilment centre, along with an insertion order and a label, and sent to the newspaper, which in turn bills the agency directly.

The process is much simpler and more efficient than the one it replaced, in which it could take several weeks for the ad to pass back and forth for approvals – after which the dealer would have to submit an invoice for payment to Xerox.

Drums has built another Extranet for Sharpe Blackmore – this one a marketing and advertising site designed to facilitate the agency’s dealings with client Absolut Vodka, based in Sweden.

The distance between client and agency in this case makes it difficult to collaborate on advertising through normal channels, Williams says. No matter how speedy the courier, it still can take days for copies of ads to arrive.

With the Extranet system, the client can simply go on-line to view proposed creative, make comments and changes, and in some instances conduct a collaborative session. There are also sections of the site where users can read briefing forms, take a look at past creative and competitive advertising, and review the publications recommended in its media plan.

In addition, the system provides direct e-mail access to all Sharpe Blackmore personnel. A virtual in/out board will be created, so that if the client wants to talk to a particular agency staff member, he or she can quickly find out whether that person is in the office.

On the media side of the business, Williams says, Drums is working with one of the television networks to put a control panel on the desktops of media buyers across the country, which would give them access to information about special programs, audience data, audio and video clips, briefing forms, research and chat areas.

Drums has also been talking to fast food companies about connecting them with their franchisees.