Abacus Direct Acquires SmartBase, Raises Industry Concern
Eight of the employees supporting SmartBase are located in Greenwich, CT, and "there's a few in Arkansas that support the SmartBase initiative today," said Chris Dice, president of Abacus Direct, Broomfield, CO. Abacus intends to "take any Connecticut-based employees, and we'd probably base them in New York City in our offices there," said Dice.
SmartBase will be managed under Abacus, and "we plan to add a ton of employees over the coming months," said Dice.
Meanwhile, a source who asked to remain anonymous said, "Despite what [Abacus'] intentions are, none of the SmartBase employees will be accepting positions with Abacus." The source said all of the current SmartBase staff had been offered positions by Abacus and declined. Dice was unavailable to confirm this.
The two databases will remain separate for the near future, but Abacus' long-term goal is to "embrace those clients using the Abacus technology," said Dice. However, the source said that Abacus intends to incorporate SmartBase's "modeling techniques and capabilities" into Abacus'.
At least one list professional has doubts about the benefits of the acquisition. Although the deal "continues to reinforce the fact that Abacus is the player in this field," it poses a hindrance to customer acquisition, according to Lesli Rodgers, president of LR Direct Ltd., a full-service list brokerage and management firm in Monroe, CT. "So, for them, mazel tov. For the rest of us, I don't think it helps us any," she said.
"My biggest concern quite frankly is that the bigger they get and the more exclusive they become, they represent the only place to go. And I think that they are doing a disservice to the very best customers in the United States, because they are inundating them with too much mail. And, I think that in the long run they are actually going to cost us customers instead of acquiring them," said Rodgers.
SmartBase, acquired for $4.7 million, is a membership database for catalogers and mail-order consumer merchandise marketers. Abacus and Acxiom began talks for the acquisition as a result of the strategic partnership entered into by the two companies last September.
"One of the terms and conditions of that was that in exchange for various business initiatives together was Acxiom had made a decision to kind of wind down SmartBase," Dice said.
"We decided, why not embrace the clients that SmartBase has. Why not just go ahead and make that officially part of the Abacus Alliance, and they were willing to do a transaction with us, and so we did one," he said.
The goal of the acquisition for Abacus is twofold. First, there's significant overlap of the SmartBase database and the Alliance, Abacus' database, according to Dice, who said SmartBase is "much, much smaller than Abacus," but declined to give the size of the database. Abacus wants to offer its more comprehensive resources to those overlapping participants, Dice said.