Privacy Clouds Abacus-DoubleClick Merger's European Opportunities
"You have to be incredibly concerned and careful when doing any kind of Internet marketing overseas," said Dan Snyder, chairman of Abacus Direct Europe. "We're obviously going to have to go through a lot of due diligence, which is probably the number-one reason that the initial focus will be primarily domestic."
But even in the U.S. the merged concern faces privacy issues. Privacy groups blasted the merger soon after it was announced, arguing that the combination would collect far too much personal information about consumers and undermine privacy.
Europeans are even more cautious than Americans. The merger announcement came just as arguments between the US and Europe on the free flow of data had stalled.
In mid-June, representatives from the United States and the European Union announced that both groups missed a self-imposed deadline to come to terms on safe harbor principles. The parties said they will have an agreement by fall.
"However this evolves," said Snyder, "major corporations are going to have to make terribly sure that they are in 100-percent compliance, whether it's legal or voluntary."
In theory, the merged company should provide its European customers with targeted marketing opportunities, but Snyder and DoubleClick spokeswoman Amy Shapiro said those opportunities are still "downstream."
U.S. parent company Broomfield, CO-based Abacus Direct manages the largest database of consumer catalog buying habits in the U.S. It holds records from 1,100 catalogs direct marketers use to predict purchasing behavior in 88 million U.S. homes.
DoubleClick will be able to combine its ad placement technology used in 7,400 Web sites worldwide with data from Abacus' co-op database. Abacus in turn will use DoubleClick's technology to help its catalog customers find strategies to attract high-quality traffic to their Web sites.
In Europe, meanwhile, both merger partners will continue to boost their traditional business, with Abacus focusing on "the good head start we have in Europe," Snyder said.
Since last January, when Abacus signed a fifty-fifty venture with Dutch publishing and information giant VNU, it has opened a UK office here and plans to open in Germany before year-end. French and Dutch operations are also in the works.
The UK operation employs eight and plans to add another four account managers soon. It has more than 40 mail-order clients who are part of the Abacus Europe Alliance Database that is similar to the US organizations.
Some companies in the Alliance are American companies mailing to the UK, but most are UK-based. The Abacus Europe Alliance has a database of about 12 million individuals.
Snyder is betting the UK division will grow even more in the future.
"There is less of a focus on mail order in the UK and more of a focus on print or off-the-page adverting," said Snyder. "But direct marketing is also unbelievably fertile right now in the UK. [They] are really embracing it as a distribution channel."