DoubleClick Adds Abacus to the Count
A MID-JUNE MERGER of DoubleClick Inc. and Abacus Direct Corp. has industry observers and privacy advocates alike wondering who will benefit and at what cost-aside from the $1 billion in stock that DoubleClick is paying for the catalog cooperative database company.
The merger was the second significant acquisition involving an information vendor and a marketing firm in June. Earlier in the month Omaha, NE-based InfoUSA bought Donnelley Marketing for $200 million in cash.
DoubleClick’s purchase, which should be completed in third quarter 1999, comes at a time when catalogers are turning to the Internet as an ancillary-and in some cases primary-sales channel. DoubleClick, the New York Internet advertising firm that acquired Abacus Direct, will be able to combine its targeting abilities with Abacus’ extensive file of catalog purchasing behavior.
The potential audience for Internet targeted advertisements is enormous. Broomfield, CO-based Abacus Direct currently maintains only a few million e-mail addresses in its 88-million household catalog cooperative database. But DoubleClick president Kevin Ryan estimates that his company can reach 75 million individuals each month. Once the databases are fully joined, marketers will be able to link an individual’s computer browser with his home address, providing a more-complete picture of a given consumer.
According to Abacus founder, chairman and CEO Tony White, the company will operate under its original name as a division of DoubleClick. Its product names will remain the same, as will the membership requirement for participation by Internet-based marketers. White will join the DoubleClick board of directors.
The announcement came as a surprise for Acxiom top executive Charles D. Morgan, whose company inked a strategic alliance with Abacus in mid-May. But Morgan sees increased opportunity for his company.
“[DoubleClick is] heading down the personalization route, and certainly the Acxiom Data Network is going to offer products to assist with personalization,” says Morgan. “I look at them as powerful channel partners.”
The data collection necessary for personalization has raised concerns from privacy advocates. Evan Hendricks, editor and publisher of the Privacy Times newsletter, cautions that the information gathered is potentially harmful to a consumer, and that DoubleClick should provide an opt-in, rather than opt-out, mechanism.
“[Gathered data] can be subpoenaed by a civil litigant or the government. Health, community activism, or sexual orientation information could be used against you. I would also be concerned with a marketer having your credit card information and asking if you want a free trial subscription, [which would, absent a cancellation, be billed to the card],” says Hendricks.
Ryan is quick to reassure consumers regarding questions of privacy. DoubleClick asks merchants for which it places banner ads to include links to its centralized database, where they can elect to opt out.
“I have been on Federal Trade Commission panels in the past, and Tony [White] is on the board of directors of the Direct Marketing Association,” he says. And despite a significant amount of media exposure for the merger, Ryan notes that no consumers have called him with privacy concerns.
