Online ad network DoubleClick and Abacus last week agreed to a $1 billion merger through a stock-for-stock transaction. The combined company will use the DoubleClick name.
Broomfield, Colo.-based Abacus manages customer databases of most catalog companies as well as some retailers, including Williams-Sonoma and Bloomingdale's.
"Abacus wants to take its techniques onto the Net," said Chairman-CEO Tony White, who will become a member of DoubleClick's board. "The advantage you get from data from paper catalogs is that these are people already comfortable with buying in non-face-to-face transactions."
FOLLOWS 2 OTHER DEALS
The DoubleClick deal follows on the heels of an agreement between Abacus and Electronic Data Systems' Centrobe reached two weeks ago to form the Abacus Publishing Alliance, a cooperative database that gives publishers access to purchasing data based on consumer interests.
In May, Abacus and Acxiom Corp., another market research provider, agreed to jointly market their databases in a way that expands what both companies can offer customers. Abacus' database alone contains five years of purchasing history of some 88 million U.S. households and is updated weekly.
The Abacus-Centrobe alliance offers magazine publishers a better way to zero in on potential subscribers and boost circulation. Centrobe provides fulfillment services for more than 450 magazines.
The alliance will combine a number of subscriber databases with those of catalogs and retailers. The merged lists, executives claim, will give publishers a more accurate list of who's likely to buy what. Publishers in particular rely heavily on direct mail as a way to build magazine circulation.
"The ultimate goal is to be a resource of prospective names and a resource for cross-selling and vertical selling," said Sam Cardonsky, VP-publishing services at Abacus. Time Inc. and Children's Television Workshop already have agreed to sign on with the new alliance. International Data Group's PC World, which uses Abacus for database management and Centrobe for fulfillment, also will be part of the new alliance.
"People who like to read magazines are always going to be good prospects," said Shawne Burke Pecar, VP-circulation for PC World. "The more publishers who join the Abacus alliance, the better for us. You also want people who respond to direct mail, such as catalog shoppers."
One other not-insignificant benefit to clients of both Abacus and Centrobe who join the alliance will be in cost-per-lead and cost-per-acquisition savings.
'ECONOMIES OF SCALE'
There are "economies of scale for us with the two companies working together," said Ms. Burke Pecar, whose subscription records are housed at Centrobe. "If we can mail economically, we'll mail as much as we can."
DoubleClick, through its merger with Abacus, gains an edge in online direct marketing through the market research company's powerful database alliances.
"The Abacus database is 80 million households of retail information and purchasing behavior," said Kevin O'Connor, CEO of DoubleClick. "Today, DoubleClick has none of that information. . . . We plan to maintain the growth rates of DoubleClick with the combined company."
The upside in creating a rich database of consumers on the Web is tremendous, one industry observer said, but she warned DoubleClick will need to exercise caution.
"In order for an Abacus on the Web to be successful, it needs to respect consumer privacy and consumer choice," said Rosalind Resnick, president of