Abacus Buy to Bolster Epsilon’s Retail Presence

Marketing technology outfit Epsilon has agreed to purchase data firm Abacus, furthering the consolidation of the once-sprawling DoubleClick empire. Through the $435 million all-cash acquisition, Epsilon will fortify its marketing-related data services, particularly in the retail sector. In turn, Abacus is poised to connect with Epsilon’s non-retail clients in the financial, pharmaceutical, travel and other verticals.

“Obviously, Abacus will become essentially our retail solutions group,” said Epsilon President and CEO Michael Iaccarino, adding, “We don’t have a lot of retail so it’s perfect for us.” Abacus now will be an Epsilon business unit. “It’s more of a solutions product brand,” he said.

The move solidifies Epsilon’s status as foster parent for DoubleClick offspring. In February, Epsilon took DoubleClick’s Email Solutions unit under its wing, pairing it with its own e-mail marketing services arm.

Abacus will maintain its name under the Epsilon brand, and its more than 500 staffers, including senior execs, will now serve Epsilon. Abacus office locations in Colorado, Illinois and the UK will remain as is, according to Iaccarino. The acquisition is planned to close in Q1 2007, pending regulatory approval. Epsilon, which works with clients including BellSouth, Midas and Hilton, is a subsidiary of Alliance Data Systems Corporation, a transaction, credit and marketing service provider.

“The Abacus data does allow us to augment our overall data product,” said Iaccarino.

Abacus data are used by over 1,500 multi-channel catalog companies, retail firms, online merchants, and B-to-B clients such as Brookstone, Patagonia and Sur La Table. The company manages billions transactions and allows its co-op member clients (mainly catalogers) to access aggregated data from the transactional database to help predict future buying behavior and craft marketing campaigns.

Abacus was connected to a privacy scare that erupted in 1999 when then new parent company, DoubleClick, decided to pair Abacus information on U.S. household and consumer catalog transactions with DoubleClick data gleaned from online user activity. DoubleClick eventually ceased the effort. Following its sale to equity firm Hellman and Friedman in April, DoubleClick has continued its focus on rich media and search advertising technology and campaign management products.

According to Iaccarino, Epsilon has no plans to merge online data such as e-mail addresses with Abacus information. “This is different than what DoubleClick wanted to do,” he said. “There is no plan at this point to integrate anything from an e-mail address perspective with the Abacus data.”

Epsilon also enhanced its data services with the September purchase of consumer and business data firm CPC Associates, Inc., a company known for its database of “new mover” information. A year earlier, Epsilon ramped up its e-mail services through the acquisition of Bigfoot Interactive. The company is now segmented into four divisions, Epsilon Interactive Services, Agency and Direct Services, Strategic Database Services and Data Services.

If, for instance, a financial services client were to develop a credit card offer for customer acquisition purposes, Iaccarino said, Abacus information could be added as an attribute in a CPC file otherwise containing information like demographic or household income data.

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