HotData to Dig Deeper to Surfers' Lifestyles, Sidesteps Privacy Cauldron

HotData Inc., which this week launched technology designed to couple salespeople's prospect lists with in-depth customer database information, plans to sell a similar service to e-commerce firms, executives told DM News.

If HotData's plans unfold as expected, by the end of the year it will be able to instantly give cyber-businesses lifestyle demographics on the geographic areas where individual customers shopping on their sites live.

The Austin, TX, company will bill the planned service as a way for Net marketers to tap customer data that runs deeper than what they get from Web surfers' online registration information or from monitoring shoppers' surfing habits. HotData also will use the service to update sites' existing customer data, said Johnny Anderson, president/CEO of HotData.

“On the electronic commerce side of the house, [the only thing] sites target with today is the online experience,” Anderson said. “They target based on where somebody has browsed or they target based on what somebody has bought before or they target based on an explicit personalization” when Netizens tell marketers directly what interests them.

Anderson added that such techniques create similar problems as those faced by catalogers when, for example, a shopper buys a gift for another person with entirely different tastes. If a young man buys a quilting book for his grandmother on an e-commerce site, the electronic book retailer might later target him later with books on crocheting — a pitch that's unlikely to result in a sale.

HotData has reseller agreements with 14 sources of consumer data, including Dun & Bradstreet, Experian, Acxiom Corp. and the U.S. Postal Service's change-of-address database. The pacts vary, but HotData gets price cuts on information, Anderson said.

“We get a discount because we buy data by the ton and sell it by the ounce,” he said.

As the service is envisioned, e-commerce sites that want information on a shopper at their sites will use programming software provided by HotData to access consumer data through the Net. The system is designed to respond in less than two seconds.

HotData will deliver lifestyle demographics on the area where a customer lives. Information available on a shopper's geographic region includes average income, home value, auto value, age, education and number of children, as well as the area's past receptivity to outdoor goods, fitness merchandise and a range of other products.

Then, Anderson said, when an auto site wants to know how to market to a visiting cyber-shopper, “I can bring back the average car price in that area.”

Because the data companies assemble information by households, HotData's service will work only for e-commerce sites that gather users' addresses. HotData itself does not break out data by households, instead serving up information by carrier routes -the neighborhoods that postal workers deliver to. The company wants to side-step the hot cauldron of online consumer privacy issues.

“I don't want to get into the privacy debate about being able to deliver an individual's household demographic over the Internet. It's a lightning rod right now,” he said. “If I can get it to the carrier route, I'm down to the lowest level without getting into somebody's personal household buying habits.”

HotData's clients will be able to turn to the company as a single source for the database companies' information, and HotData is promoting the sales force automation service it announced last week as a sort of one-stop shop for finding out details on salespeople's potential customers.

Unlike its planned e-commerce application, the SFA service will deliver business and consumer information through the Internet directly into software applications that salespeople use to track the names of their leads. HotData is touting its ability to clean existing data through the service and then add to it.

HotData picked the SFA market because the company found that small- and mid-sized businesses generally lack such a service, Anderson said. The company anticipates selling the product to a wide range of clients, from realtors to stockbrokers.

The company expects to target accounting firms, call centers, help desks and other businesses with the technology down the road.

HotData charges firms a subscription fee for the SFA service. Monthly fees range from $19.95 to the “hundreds of dollars,” Anderson said, adding he expects subscription fees for the planned e-commerce service to fall into a “comparable” range.

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