Cogit Uses Anonymous Profiling to Avoid Privacy Complaints

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Marketing services company Cogit.com is expected Monday to unveil RealTarget 2.0, a product the company claims will allow e-commerce sites to deliver targeted advertising, promotions and content to visitors by using anonymous profiles and predictive models.


This new product's applications are minimally affected by the database marketing land mines that have gone off of late, namely the furor caused by DoubleClick's profiling practices, as well as the upholding of the Driver Privacy Protection Act by the Supreme Court.


RealTarget 2.0 draws an anonymous consumer profile using offline information derived from the Polk Co.'s database. Polk, Southfield, MI, which built its business by providing data to the automotive industry, has demographic and lifestyle data on some 111 million households that it accumulates from states' vehicle registrations, warranty cards on consumer goods and other sources.


Cogit's profiling plan entails the following:


When a consumer makes a purchase at an e-commerce site, he must supply a name and address. At that point, Cogit can link the online user's name with the information in Polk's database and drop a cookie into the user's hard drive. These consumers are then lumped into market segments, such as cowboys, yuppies or soccer moms.


When a consumer visits a client site, such as Towerrecords.com, he is automatically served with a promotion that is likely to appeal to him. The user profile is further modified according to his activity on the site. For example, if someone from the "cowboy" segment begins to purchase heavy metal CDs, the new offers will reflect this.


A user can only be profiled via a cookie if he has registered or purchased an item at the client site, as well as any of San Francisco-based Cogit's partner sites, including iGo.com, Women.com and Tickets.com.


Merging offline information with online information has been a hot topic lately. Embattled online advertising services firm DoubleClick Inc., New York, recently announced that until there are government and industry standards, it has suspended a plan to marry catalog purchasing information from recently acquired Abacus Direct Corp.'s co-op database with users' Web behavior.


However, Cogit's product isn't likely to draw the fire its competitor endured, according to Hollis Chin, the company's vice president of marketing.


"We, from the start, never planned or needed to use personal information because we can predict [behavior] based on demographics and lifestyle information. That data has proven over the years to be highly predictive of one's propensity to buy. From my understanding, this is the direction [DoubleClick] is now headed in."


The information gathered on a client site is not shared with other Cogit clients or third-party marketers.


"Our model does not share client-specific information with other clients. [DoubleClick's] business model is based on that," said Chin. "We protect the client's confidentiality."


A potential stumbling block for Cogit.com's efforts is the Driver Privacy Protection Act, which was recently upheld by the Supreme Court. This act will forbid database marketers from using driver's license data for marketing as of June 1. The loss of this information will sting many marketers. According to Chin, however, the Polk database has many other sources to draw from.


"The [lack of] department of motor vehicle records will affect the data that the Polk Co. will be able to obtain, but that is only one of their many sources of information," said Chin. "In addition to obtaining DMV information, they obtain Census information and product warranty information from PCs and other consumer products. They still have access to a wealth of information."


Cogit competes not only with DoubleClick, but also Engage, which claims to have a database of 42 million Web users' profiles gathered through its AudienceNet collection of Web sites. Additionally, 24/7 Media has partnered with Naviant Technology Solutions to use its IQ2.net database.
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