Sudden Dot-Com Closure Catches Clients Flatfooted
It also caught some clients by surprise, and they are now left scrambling to find alternatives.
Larry Burns, president/CEO of online marketing and promotions firm StartSampling Inc. said his company is poised for growth, and the closure of New York-based Primary Knowledge presents an unexpected hurdle.
"We've been successful in getting some [additional] financing from our investors, and our business prospect is healthy and robust," Burns said. "I'm looking to move forward and this happened. You're always concerned with having a backup plan. Unfortunately for us, we hadn't made concrete plans for replacements in the hopes that [Primary Knowledge] would be here."
Since the announcement, 3-year-old StartSampling, Carol Stream, IL, has been searching for another intelligence-gathering solution and has been doing some work internally, slowing down the process.
What hurts most about Primary Knowledge's demise is that the company provided unique customer service and reporting that will be difficult to replace, Burns said.
"They were able to marry all the information we gave them so we can look at a particular group of consumers and see what areas they were spending most of their time in," Burns said. "What was really nice -- and because our relationship with [Primary Knowledge] was still young, we didn't really get to fully use it -- was they also looked at the information flow that [was] contained in our data and suggested to us findings that may not have been apparent to us. That's the major element that I will certainly miss."
For example, although the relationship was in its infancy, Primary Knowledge gave the company loyalty and retention rates on its members using StartSampling's internal data. This is information that StartSampling otherwise would have had to get from a service such as Nielsen//NetRatings. StartSampling executives believe this was the tip of the iceberg and that now they will never know what Primary Knowledge might have uncovered.
While StartSampling will take its time choosing another solution, it hopes to have one in place by the end of summer, Burns said.
"We had consciously chosen to survive on the basics more so than making a lot of additional [internal] resource investments, further embedding [Primary Knowledge] tools in our system," he said. "It hurts us in terms of our future growth plans because we now have to address this issue in order to move on."
Founded in 1999, Primary Knowledge positioned itself as an outsourced provider of Internet business intelligence. Headed by CEO Peter Adams, the company warehoused and mined data from log files, registration and transaction databases, ad servers, and outbound and inbound e-mail servers.
Calls made to the company were not returned.
Jay Mellman, vice president of corporate and channel marketing at Mercury Interactive, Sunnyvale, CA, a provider of enterprise testing and performance management solutions, said his company saw the possibility of Primary Knowledge's closure but did not expect it to happen so suddenly.
"Luckily, we were already evaluating other options that included internal supportive alternatives," Mellman said. "It hasn't been too much of a business lurch for us, but more of a psychological lurch. In our business we need to understand how our promotions are performing and how people are using our site. We certainly would be much happier if they were still in business."
Because Mercury Interactive has internal support, Mellman said, it is in a better position to handle functions minus the outsourced analysis company.
"We're in the position to at least get some of that information ourselves, so that helps us quite a bit. We're going to look at what's out there and also look at what we can do [internally]," Mellman said.
Bolt Inc., an Internet portal for teen-agers that used Primary Knowledge to gather clickstream data about visitors to bolt.com, was able to replace the service quickly.
"Luckily we didn't rely wholly on their service," said Mark Stutzman, chief technology officer at Bolt.
"We've always built complementary solutions that work with one another, so it wasn't a huge problem for us," he said. "Our data is very crucial to the solutions we provide our clients, and we couldn't afford to let anything slow us down."
Bolt, New York, has a data warehouse system that uses both internal and outside solutions. Companies such as Procter & Gamble, America Online, Coca-Cola and Pepsi use Bolt's data to market to teen-agers better.
Despite Primary Knowledge's closure, an analyst at technology research firm Forrester Research, Cambridge, MA, said the analytical market overall is doing well and there does not seem to be any specific downward trend in the industry.
"There are not many outsourcing companies out there," said Joe Butt, a senior analyst at the firm. "But from those that are, a lot are beginning to offer analytics around ASPs, which would make outsourced hosting slightly more irrelevant."