DoubleClick Locks Up Abacus
June 14, 1999
DoubleClick's purchase of marketing database
provider Abacus Direct locks up a unique asset and
signals the beginning of eCommerce's conquest of
the direct mail channel.
by Jim Nail
DoubleClick has widened its lead in the on-line advertising race
by gobbling up catalog database owner Abacus for $1 billion. We
like the deal because:
Transaction data is the crown jewel. More than 1,100
catalogers have contributed 2 billion purchases to Abacus'
Alliance cooperative databases, which allow catalog
members use of the database in exchange for providing
input. No other marketing database matches this
storehouse of information. Of all data forms, actual
purchase behavior stands at the pinnacle of marketers'
data hierarchy.
Data analysis skills separate winners from losers.
Abacus' sophisticated data analysis and predictive models
honed via direct mail, combined with DoubleClick's on-line
experience, are a potent combination. While other on-line
ad companies can target ads based on IP address, Web
surfing behavior, or demographics, few will match the
off-line/on-line data expertise of the new alliance.
The deal will cause other important repercussions:
Acxiom and NetGravity get together. Experian
partnered with AdForce long ago, and Intelliquest and 24/7
Media joined up last fall. NetGravity's Global Profiling
System captures on-line user information but lacks an
off-line component. Acxiom's scale and the diversity of its
data fill this gap.
Catalogers find a smoother path to the Net. Direct
marketers apply data analysis techniques to selecting and
segmenting mailing lists. With this merger they can apply
the same techniques and skip the learning curve of
clickstream and IP address targeting options. Greater ease
of use combined with attractive price points will wake
catalogers up to the Web.
A new light shines on privacy issues. Consumers accept
that catalogs swap their names, but few know that the
details of their purchases are shared as well. As
off-line/on-line combinations form, advocates like the
Electronic Privacy Information Center will insist on open
consent guidelines on and off the Web.
Wall Street grows comfortable with hybrid mergers.
While DoubleClick's decline of 10% early today may seem
drastic, it pales in comparison to Lycos' 30% drop after its
USA Networks announcement. As investors gradually see
the long-term value of DoubleClick-Abacus, they will
accept more off-line/on-line deals. |
