From: Harvey Newstrom (mail@HarveyNewstrom.com)
Date: Wed Jan 09 2002 - 13:32:37 MST
Sometimes public opinion can fight against big corporations!
-- Harvey Newstrom, CISSP <www.HarveyNewstrom.com> Principal Security Consultant, Newstaff Inc. <www.Newstaff.com> Board of Directors, Extropy Institute <www.Extropy.org> Cofounder, Pro-Act <www.ProgressAction.org> ------- Begin Forwarded Message ------- > http://news.cnet.com/news/0-1005-200-8407125.html > > Online advertising company DoubleClick has phased out its Internet ad > profiling service as > part of its shift from media services, proving consumer tracking > doesn't always pay. > > The New York-based company jettisoned its "intelligent" targeting > service effective Dec. > 31, a company representative confirmed Tuesday. Launched in 2000, the > product allowed > marketers to target ads based on a database of some 100 million > profiles. The technology > tracked people online anonymously and then served ads based on > personal tastes. > > The company simply decided not to continue the product in 2002, > according to the > representative. > > But profiling largely failed to pan out the way DoubleClick hoped. > Once heralded as the > key to online advertising's success, such tracking behavior quickly > caused privacy > headaches for the company. In 2000, it came under fire from federal > regulators and privacy > advocates for its practice of compiling dossiers on consumers. > Sources said DoubleClick > has long struggled to find customers for its profiling products > because of ongoing privacy > concerns in the industry. > > Then, with the dot-com collapse, the company had trouble selling > higher-priced ads on its > network because they often came with minimal benefits, analysts say. > > "The lift you get from that kind of profiling just isn't enough to > pay all that extra data > storage and process costs," said Jim Nail, an advertising analyst at > Forrester Research. > > In the last 16 months, DoubleClick has worked to deflect its > dependence on the sickly > advertising market. It has built up its research, data and technology > divisions while > slowly dismantling its media division. > > In November, the head of DoubleClick's media division, Barry Salzman, > resigned. The > company also sold its European media division and said it was > considering options for the > U.S. media arm. Sealing the company's bent toward technology, David > Rosenblatt, the > company's former technology chief, became president in late December. > > The intelligent targeting product was originally launched under > Abacus Online, a product > of DoubleClick's $1.7 billion merger with data-collection agency > Abacus Direct. But the > company quietly dissolved the division in late 2000. Another division > operated under > Abacus Online called PredictiveMail, a combined e-mail and > direct-mail marketing service, > was folded into Abacus. > > The company's previous plans to launch an anonymous profile service > that matched online > and offline data was also scotched. > > Nail said DoubleClick sold the targeted ads for a premium of $10 to > $12 per thousand > impressions; random rotation on the DoubleClick network typically > cost $3 per thousand. > Although the company promised targeted-ad results of 200 percent to > 300 percent higher > than typical conversions--or the number of times a customer acted on > an advertisement--the > costs were still too high for many marketers. > > "Even if you get a 300 percent lift, it isn't worth the added cost. > It doesn't pay off," > Nail said.
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