24/7 Media Inc. agreed this week to acquire e-mail database management and marketing company ConsumerNet for $52 million in stock. The companies said the deal will create the first e-mail database that allows marketers to significantly roll out an offer.
“The problem thus far [with e-mail] has been that you test and then go back and say, 'OK, let me roll out,' and they say, 'Here are the additional 50 names you can roll out to,' ” said Michael Rowsom, senior vice president at 24/7 Media, New York.
24/7 also claims the acquisition makes it the No. 1 source of opt-in e-mail, with a database of just over 11 million names.
Under terms of the deal, ConsumerNet, Red Bank, NJ, will be merged with 24/7 Mail, an independent subsidiary formed when 24/7 acquired e-mail company Sift Inc., Sunnyvale, CA, in March in a stock swap worth $22 million. The 11 million addresses come from a hodgepodge of sources, including Sift, which had 3 million e-mail addresses. Through its own growth and the addition of e-mail lists under management from sites in the 24/7 ad network, 24/7 has since grown that database to 8.3 million addresses.
Within ConsumerNet's 3 million names are 450,000 names, addresses, e-mail addresses with self-reported buying behavior collected through registration cards that come with CDs, videos and other entertainment products. Also, ConsumerNet recently began a co-op e-mail database with 125 sites that has resulted in 2.5 million e-mail addresses.
At press time, 24/7 officials did not know how much overlap there is in the 24/7 and ConsumerNet databases.
“Between the two companies, we have 11 million names owned and/or under management,” Rowsom said. “My guess is [overlap is] going to be relatively low given the diversity of the sources.”
The combined database's selects include computer owner and type; music by genre; pet owners; education; age; marital status; dwelling type; estimated household income; presence of children; ZIP codes and 12-, 3-, 6- and 1-month mail-order buyers.
A recent count 24/7 ran for a client in the health-and-fitness select resulted in 470,000 names, Rowsom said, adding that the company also plans to offer hotlines — new names and 1-month responders. He estimated that all the selects are available on 60 percent of the combined database. “We'll go through some other processes to enhance the balance.”
Meanwhile, some in the industry questioned 24/7's definition of opt in. At issue is whether during the registration process at a Web site the registrant physically checks a box and agrees to receive marketing e-mail or if the box is checked by default.
“If it's prechecked by default, it's not opt in — and many of the major direct marketers are starting to realize that,” said Roy Schwedelson, president of hi-tech list management firm Worldata, Boca Raton, FL. “A prechecked box means a person has to take an action to uncheck it. That makes it a negative option.”
Others say as long as it's clearly stated during the registration process that the recipient's e-mail address may be shared with other marketers, the process is opt in. “It's right next to the submit button,” Rowsom said, referring to the permission box on one site in question.
However, Schwedelson contends, “You have to build your offer and make it enticing enough that they're going to check it themselves. Because long-term, the real pro direct marketers do not want a problem with consumers on the Internet. Lists like this are going to come back and bite them in the back.”
For ConsumerNet's part, CEO Paul Chachko said its co-op database is opt in by anyone's definition.
“All of our sites are truly, 100 percent third-party opt in,” he said. “We do not accept data from any client that is not self reported and voluntarily signed up [by the e-mail addressee].”
For example, Chachko said, the co-op alliance resulted in 12 million names, just 3 million of which are currently opted in. ConsumerNet is opting in the other 8 million by requesting their permission through the original source. In tests, he said, between 5 and 20 percent of recipients opted in.
Separately, 24/7 reported last week that its revenue for the second quarter of 1999 was $17.2 million, up 50 percent over the first quarter. The company reported a net loss of $7.2 million — or 37 cents per share — during the same period. It reported a net loss of $14.4 million for the first half of 1999. The company credited an increase in product offerings to advertisers for the revenue boost. 24/7 claims to have delivered 2.5 billion ad impressions across its network in June.
