Cogit.com Licenses Polk Data for Profiling
This is the third major announcement since the beginning of the summer in which an Internet concern is attempting to use data gathered offline for online marketing purposes.
In August, Internet ad network 24/7 Media Inc. said it was involved in Naviant Technology Solutions' $46.5 million acquisition of database concern IQ2.net from Intelliquest and planned to use the data to send targeted banner ads.
In June, online ad network DoubleClick Inc. announced it planned a $1 billion purchase of Abacus Direct Corp., manager of the largest database of consumer catalog buying habits in the United States. How DoubleClick and Abacus will use their data to create products for marketers is still unclear.
At stake in all three deals is who can marry Web surfers' clicking behavior with their household demographic and buying behavior, and develop products for marketers that will help the Internet live up to its promise of one-to-one offer-targeting.
"Internet marketers are addressing the same problems marketers have been addressing for decades," said Hal Widlansky, senior director of marketing at Cogit.com, San Francisco. "It costs too much to acquire a customer. Conversion rates aren't nearly what we'd like; the typical e-commerce site is converting about 3 percent of its traffic to purchases," he said. "If Macy's only sold to three out of 100 people, there wouldn't be a chain."
The trick is to build profiles that will identify who is ripe for what pitches.
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 registration information, warranty cards on consumer goods and other sources.
Cogit.com's plans for the information entail the following: When someone makes a purchase at an e-commerce site, he must supply his name and address. At that point, Cogit.com can link the online user's name with the information in Polk's database and drop a cookie into the user's hard drive.
"E-commerce sites are unique in that when they sell something, they know who they sold it to, because they have to ship it," said Widlansky.
As a result, Cogit.com ends up with an Internet user profile that marries demographic and psychographic information from Polk to the person's buying behavior online.
Cogit.com has tapped Polk's data to offer two products. The first is a subscription-based product called RealProfile. It offers e-commerce site owners reports on their customers' demographics and lifestyles. According to Cogit.com, the reports - for from $20,000 to $120,000 per year - will cluster consumers into groups that marketers can understand.
"Our cowboys come back looking like cowboys and our urban elites come back looking like urban elites," said Peter Corrao, CEO of Cogit.com. "These are going to look a lot like marketing trend reports."
The second product, RealTarget, is slated to be available Nov. 1.
Subscribers to that service will be able to use the Cogit.com's Internet user profiles to deliver targeted offers to Web site visitors in "real time" or while they're on the site.
Unlike DoubleClick and 24/7 however, Cogit.com has no plans to use its profiles to deliver banner advertising.
"DoubleClick wants to own the off-site advertising component of somebody's marketing dollars," said Widlansky. "We want to own the on-site promotions driven component of the site's marketing dollars," he said adding "We don't do banners. We do the actual promotions that are going on the Web site."
RealTarget is priced by "user session" or visit to a site and runs from $2.50 to $25 per thousand sessions depending on traffic volume. The company at press time said it had about 20 signed contracts.