*DoubleClick: Profiling Not Dead

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Online ad services firm DoubleClick Inc.'s suspension of plans to marry consumers' Web behavior with offline catalog buying data apparently puts it well behind competing firms 24/7 Media Inc. and Engage Technologies Inc. in the race to deliver user-profile database driven ads across multiple sites.


But DoubleClick CEO Kevin O'Connor denies his firm has fallen behind.


"We've been doing targeted advertising for four years," said O'Connor. "I can't announce [anything], but [profile driven banners are] something we're actively developing. In every example when we launch something, we very quickly become the market leader. We will in this case as well."


Under increasing pressure from privacy advocates and other consumer protection groups, embattled DoubleClick, New York, announced it will not merge postal names and addresses from recently acquired Abacus Direct Corp.'s database with anonymous user activity across the Internet for ad-profiling purposes until there are government and industry standards.


"We commit today, that until there is agreement between government and industry on privacy standards, we will not link personally identifiable information to anonymous user activity across Web sites," O'Connor said in a statement.


While claiming the company's core business is unaffected by the recent events, O'Connor confirmed, however, that a significant reason for acquiring Abacus was the hope that its data would give banners a lift from their current sub-0.5 percent industry average click-through rate.


Abacus manages a co-op database containing off-line buying information from some 1,100 catalogers to help predict the buying behavior of people in 88 million U.S. homes. DoubleClick planned to use the data to identify likely buyers online.


O'Connor said the plan to connect Abacus data with Web behavior is not dead.


"It's suspended until we know what the [privacy] standards are going to be," he said. "No one is saying you can never take a name and associate it with behavior on the Web. What's in question is under what circumstances."


Meanwhile, competitors' testing of database profile-driven ads is underway. Among those testing Engage's Knowledge database, which became commercially available in October, is New York online marketing services firm Cybuy.


"In early tests in delivering banners to Engage-profiled eyeballs in several categories including parenting travel and sports, they showed an early lift over run-of-network, non-profiled eyeballs in click-through rates," said Ruth Stevens, senior vice president, direct marketing at Cybuy. She declined to get more specific.


Engage, Andover, MA, claims its database comprises anonymous profiles of the surfing behavior of 42 million Internet users reachable through a collection of Web sites dubbed AudienceNet.


Engage executives could not be reached for comment.


Competitor 24/7 Media Inc., which has profile database initiatives of its own underway, blasted DoubleClick's handling of the privacy flap.


"It think they felt they're invincible and can do no wrong, that they can change a privacy policy and hope that nobody notices," said David Moore, CEO of 24/7 Media, New York. "We're disappointed with the so-called market leader and we feel that we can demonstrate a lot more responsibility."


One of the main complaints with DoubleClick's profiling plan was that the company changed its privacy policy to reflect the addition of Abacus to its business.


Last August, 24/7 Media revealed it was involved in Newtown Square, PA-based 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.


While industry observers have all along questioned DoubleClick's ability to merge Abacus' data with information collected online, IQ2.net's database has a built-in


Internet connection. IQ2.net handles 80 percent of online hi-tech hardware and software warranty registrations for companies like Hewlett Packard and IBM, giving it a database of 12.1 million households of hi-tech product users.


Since the registrations are done online, IQ2.net is able to place cookies for 24/7 into registrants' hard drives. As a result, IQ2.net can identify at least the registrant and the demographics of the registering household as they browse sites under 24/7' s umbrella.


The IQ2.net deal was part of 24/7's related goal of offering marketers the means to develop integrated campaigns, which may include regional online and radio advertising backed by inbound telemarketing and outbound e-mail follow-up.


To that end, 24/7 announced last week it has signed an agreement to acquire e-mail service provider Exactis.com.

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