PRIVACY: DoubleClick turns away from ad profiles

From: Harvey Newstrom (
Date: Wed Jan 09 2002 - 13:32:37 MST

Sometimes public opinion can fight against big corporations!

Harvey Newstrom, CISSP <>
Principal Security Consultant, Newstaff Inc. <>
Board of Directors, Extropy Institute <>
Cofounder, Pro-Act <>
------- Begin Forwarded Message -------
> 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.

This archive was generated by hypermail 2.1.5 : Fri Nov 01 2002 - 13:37:33 MST