DoubleClick announced this week that it has stopped offering its Intelligent Targeting service, which lets marketers target ads based on a Web surfer's browsing habits. The company said the service was shut down Dec. 31.
In a short statement, DoubleClick said: “Given the focus of our business, we have decided that the Intelligent Targeting product is not something we plan to pursue in today's environment.” However, company spokeswoman Jennifer Blum said the discontinuation of the service was not related to concerns over DoubleClick's privacy policies. She would not say whether the company abandoned the service because it was unprofitable.
Though some have interpreted DoubleClick's statement to mean the company is abandoning the use of cookie technology, that's not necessarily the case.
Jay Schwedelson, corporate vice president of Worldata/WebConnect, said there's a lot more to DoubleClick's brief statement than meets the eye. He also said both financial and privacy issues may have played a part in the company's decision.
“There's a privacy element and a business element to it,” Schwedelson said. “But in no way are consumers benefiting from the statement. They are still utilizing cookies more than anyone else in the industry and will continue to do so. Every single company that uses their DART for reporting is using cookies. Based on their statement, they can still use frequency capping, for example, and serve ads based on the user experience.”
DoubleClick has faced government scrutiny over its privacy initiatives. In January 2001, the Federal Trade Commission ended a yearlong investigation into the company's data practices.
The investigation began in February 2000 to determine whether DoubleClick merged its offline consumer data with its anonymous online consumer data. Though DoubleClick had planned to merge the data when it acquired Abacus Direct in 1999, privacy concerns and a lack of industry standards forced it to abandon that plan. As part of the agreement leading to the closure of the FTC investigation, DoubleClick modified its privacy policy to include disclosure of its use of Web bugs, creation of an opt out for cookies and clarification of its Internet address finder e-mail practices.
The FTC, in dropping its investigation against DoubleClick, said the company “never used or disclosed consumers' personally identifiable information for purposes other than those disclosed in its privacy policy.”
Joel Winston, an associate director at the FTC's division of financial practices, said in a letter sent to DoubleClick's attorney Jan. 22, 2001: “[I]t appears that DoubleClick did not combine [personally identifiable information] from Abacus Direct with click stream data collected on client Web sites.”
The latest move is seen by many as yet another of DoubleClick's attempts to divest itself of its unprofitable media business. Earlier this month, shareholders of German online advertising and marketing firm AdLINK Internet Media AG approved a plan to buy DoubleClick's European media operations for $26.9 million in cash. AdLINK also signed an exclusive 10-year deal to use DoubleClick's DART ad serving platform.
Critics said DoubleClick eventually will eliminate its U.S. media business as well. The company has been moving in that direction lately, bolstering its technology services with acquisitions. In October 2001, it purchased the technology assets from marketing firm L90 Inc., Los Angeles, for a rumored $20 million.
DoubleClick's announcement is ironic, said Mark Naples, vice president of marketing and the chief privacy officer for 24/7 Real Media Inc., DoubleClick's cross-town ad serving rival in New York. He noted that the one thing that differentiated DoubleClick from other ad serving networks, 24/7 Real Media included, was its intelligent targeting.
“They're getting out of the one thing that separated them from everyone else,” Naples said.
