Does $14 Million Worth of Email Addresses Cross the Privacy Line?

  |  October 6, 2011   |  Comments

Is Barnes & Noble's acquisition of Borders' customer data a gold mine or Pandora's box?

The disconnect between how executives and consumer privacy advocates view email marketing was never more obvious than during the latest hijinks surrounding Barnes & Noble's acquisition of Borders' customer data, including email addresses. As part of the Borders bankruptcy proceedings, Barnes & Noble paid $13.9 million for Borders' intellectual property, including its 48-million customer database. That's a gold mine, or Pandora's box of data, depending on your view of this data. It appears Barnes & Noble got a dose of both.

Barnes & Noble execs who won the data in an auction (that phrase alone is enough to give many industry folks cardiac arrest) thought the data was theirs to use as they see fit, but were forced to reach a compromise, which meant Barnes & Noble was required to send a clear message to customers about its newly purchased data. Court-appointed consumer privacy ombudsman Michael St. Patrick Baxter became the watchdog in order to ensure the data transition to Barnes & Noble was handled appropriately.

The Wall Street Journal reported that Barnes & Noble fought the proactive opt-in approach every step of the way, including providing the proof of the proposed email to Baxter with a two-hour deadline to review (somewhere, email marketers are smiling at this familiar predicament). Barnes & Noble ignored Baxter's comments (again, hits home for email marketing pros), agreeing only to use his proposed subject line, "Important Information Regarding Your Borders Account," and one minor text edit.

Baxter, in court documents, said "It was clear to the ombudsman that a robust and meaningful opt-out was critical to reaching the negotiated privacy related terms of the sale. (Barnes & Noble)'s failure to provide such relevant and material information in the opt-out notice may defeat the very purpose of the notice."

Bottom line: Borders' customers have until Oct. 29 (it appears based on media reports that it was moved from October 15) to opt out of the Barnes & Noble email program. Otherwise, you become part of the Barnes & Noble email program and let me tell you, the frequency isn't light.

Some thoughts on this situation:

  • While other brand assets were included in the $13.9 million auction price, one could value the cost-per-email subscriber at $0.29. In a competitive industry like Barnes & Noble plays in, one could see why Barnes & Noble would be attracted to this deal. That is a very low acquisition price in any shape or form.
  • Borders' subscribers and customers are likely book-buying consumers who may find Barnes & Noble to be an attractive alternative and a relevant brand. But one would argue, if they wanted emails from Borders, they would sign up for Borders email. Email permission is at its most powerful with an explicit opt-in and this is transferred permission that many will view as unacceptable, unethical, or just creepy. Some will view it as convenient. That is why…
  • Execution matters. Clearly, Barnes & Noble executives wanted to preserve as much value in their $14 million investment and that would battle other concerns like privacy and opt-in versus opt-out. I am quite confident that the company probably didn't give too much thought on the actual message or execution of it. It was more likely "it's our data and we are keeping it."

Do you agree? How would you have handled this situation?

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ABOUT THE AUTHOR

Simms Jenkins

Simms Jenkins is CEO of BrightWave Marketing, North America's leading email marketing-focused digital agency. The award-winning firm specializes in elevating email marketing and digital messaging programs that drive revenue, cut costs, and build relationships. Jenkins has led BrightWave Marketing in establishing a world-class client list including Affiliated Computer Service (A Xerox Company), Chick-fil-A, Cox Business, Phillips66, Porsche, and Southern Company. The agency was recently ranked among the fastest growing private companies by Inc. Magazine.

Jenkins was awarded the prestigious AMY 2010 Marketer of the Year from the American Marketing Association for being the top agency marketer and the Email Marketer of the Year at the Tech Marketing Awards held by the Technology Association of Georgia. Jenkins is regarded as one of the leading experts in the email marketing industry and is regularly cited by the media as such and called upon by the financial community to provide market insight and consulting.

Jenkins is the author of two definitive and highly regarded books on email marketing; The New Inbox (published in April 2013 by ClickZ/Incisive Media) and The Truth About Email Marketing (published by Pearson's Financial Times Press in 2008). Jenkins is currently the Email Marketing Best Practices Columnist for ClickZ, the largest resource of interactive marketing news and commentary in the world, online or off. His industry articles have been called one of the top 21 information sources for email marketers.

He has been featured in Fortune Magazine, The Wall Street Journal, Adweek, Bloomberg TV, Wired Magazine, and scores of other leading publications and media outlets. Jenkins is a regular speaker at major digital industry and general business conferences.

Additionally, Jenkins is the creator of EmailStatCenter.com and SocialStatCenter.com, the leading authorities on email and social media metrics. Prior to founding BrightWave Marketing, Jenkins headed the CRM group at Cox Interactive Media.

Jenkins serves on the eMarketing Association's Board of Advisors among other civic and professional boards. He is also a mentor at Flashpoint, a Georgia Tech-based startup accelerator program. Jenkins is a graduate of Denison University in Granville, Ohio and resides in Atlanta's Buckhead neighborhood with his wife and three children.

Follow and connect with Simms on Twitter, LinkedIn, Facebook, The BrightWave Blog, and his book websites at NewInboxBook.com and SimmsJenkins.com.

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