The licensing agreement aims to let Celebrate Express, Kirkland, WA, extend its e-commerce presence and improve online customer acquisition.

"[It's] targeted merchandising efforts coordinated across multiple online marketing channels and demographics," Mercent CEO Eric Best said from his Seattle office.

A publicly quoted company, Celebrate Express operates Birthday Express for high-end children's party products, Storybook for girls' specialty apparel and Costume Express for children's costumes.

Mercent Retail connects Celebrate Express' existing retail management systems -- product catalog as well as inventory and order management -- directly with online advertising channels. These connections are made through Mercent Retail's XML Web services application program interfaces.

The Mercent Retail ASP aids Celebrate Express (www.celebrateexpress.com) in several ways.

First, it helps manage the number of online channels where Celebrate Express promotes its products to include transactional marketplaces. Second, the cataloger can measure and test the performance of individual SKUs and product categories within specific channels against its overall retail strategy.

Third, the ASP allows for each SKU within a channel to be automated, audited and optimized for product assortment. This is based on key retail data like the cost of goods sold, gross margins and inventory levels.

Also, for each SKU within a channel, Mercent Retail enables the automation, auditing and optimization of promotional content pulled directly from the retail systems. Criteria include price, description, special offers and bundles.

Finally, the ASP helps Celebrate Express cut the cost and time associated with the setup, operation and optimization of each online ad channel.

Retailers currently generate nearly half of their gross e-commerce sales from third-party merchandising channels. These include shopping portals like Shopzilla and Shopping.com, transactional marketplaces like Amazon and eBay, affiliate programs like Commission Junction and LinkShare and search engine marketing platforms like Google AdWords.

"Mercent expects that this market will double by 2010," Best said. "Celebrate Express retained Mercent to strengthen their position in this market."

Celebrate Express will use Mercent's pay-for-performance pricing model.

"Unlike traditional online advertising agencies and data-feed solution providers that charge advertisers a percentage of their advertising budget with no guarantee of performance, Mercent charges subscription fees as a percentage of customer revenue," Best said. "This means customers only pay when Mercent generates revenue through Mercent Retail-supported online channels."

Mickey Alam Khan covers Internet marketing campaigns and e-commerce, agency news as well as circulation for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters