In what could be the first of several deals this year between data companies and e-mail marketing services providers, Experian last month acquired CheetahMail. The move signals Costa Mesa, Calif.-based Experianâs bid to expand its database expertise and services beyond the offline world.
Experian isnât the only large database company to position itself to take advantage of shifts in marketing communications channels toward a more integrated approach. Last year, InfoUSA acquired Yesmail and ClickAction to compete in the same space.
"The big database marketing service providers have been historically focused on postal mail," said Elana Anderson, senior analyst at Forrester Research. "The reason they need to add e-mail to that bag of tricks is that integrating multichannel marketing is becoming more crucial."
Companies like Experian are in a good position to extend data management to e-mail, Anderson said. "Experian is managing a huge database on behalf of its customers, and leveraging that data with your e-mail program makes perfect sense," she said.
Anderson expects a lot more activity in this space in the months ahead. "Weâll see large mail houses that are more postal mail focused begin to make these acquisitions," she said. "I think weâll see a lot more this year."
Potentially favorable terms for buyers could help drive deals, Anderson said. "If you look at the e-mail service provider market, there are a lot of bargains out there," she said, pointing to a glut of mid-tier e-mail marketing companies and prices of e-mail continuing to drop.
Experian said the acquisition of New York-based CheetahMail will enable its Experian Marketing Services division to provide clients with a comprehensive solution for online and offline marketing campaigns.
"Itâs an important part of our clientsâ marketing mix," said Deb Zuccarini, president of Experian Marketing Services, based in Schaumburg, Ill. She said the data company would now be able to combine its hosted database technology with CheetahMailâs e-mail technology. "It gives us the ability to have the interfaces become seamless under one roof."
Experian began looking at e-mail marketing companies three years ago. "One trend we felt would impact the industry was the need to optimize, integrate and synchronize different channels and media," Zuccarini said.
Experian initially moved into the space through its acquisition of 24/7âs Exactis e-mail marketing unit in May 2001. "It was a newer channel when we acquired it," Zuccarini explained. "We learned a tremendous amount about the space."
But the Exactis deal ultimately did not give Experian the scale it wanted in the e-mail arena, and in 2003 the company began to look at more options. "It was a build or buy decision in terms of how much more investment to make in technology," Zuccarini said.
As part of the latest deal, CheetahMail will retain its brand identity. "Nothing changes from a day-to-day perspective," said Irene Pedraza, CEO of what is now called CheetahMail, an Experian company. "Senior management stays the same, staff stays the same, technology stays the same. Weâre not getting absorbed, chewed up and spit out."
CheetahMail adds resources
Pedraza said her clients will continue to benefit from CheetahMailâs technological know-how and customer service while gaining "the resources and services of a multinational marketing services player."
The Exactis ContactMail product will be absorbed by CheetahMail. Experian also hosts a database solution and campaign management solution separate from Exactis that also will be incorporated with CheetahMailâs technology.
Zuccarini said CheetahMailâs technology is one of the things that set it apart from other companies Experian considered acquiring. "They have deeper levels of personalization and strong reporting capabilities," she said.
While its short-term focus will be the integration of CheetahMail, Experian will continue to look at potential acquisitions within the e-mail arena and other "complementary services," Zuccarini said.