DoubleClick Tilts the Playing Field

One thing that makes online media buying such an exciting field is the pace of change. You can’t settle into a groove in this business because someone’s next move might tilt the playing field. Two recent acquisitions by DoubleClick recently had that effect and have ramifications for online media buyers everywhere.

On September 25, DoubleClick announced that it had entered into an agreement to acquire @plan. inc., a research company that I’ve discussed in this column several times. @plan competed in a category with Media Metrix and Nielsen//NetRatings to provide measurement data on web sites. While in this column I have discussed weaknesses in the various methodologies of these research companies, I feel compelled to point out that @plan was the most useful tool in the category until its acquisition by DoubleClick. Of all the players in the category, @plan had the best data on psychographics and purchase intent. Since I’m a big fan of targeting advertising to Internet users by interest, I always believed @plan to be the most helpful in providing insight into online media planning.

@plan served both agencies and publishers alike. According to its web site, it counted J. Walter Thompson, Avenue A, Young & Rubicam, AGENCY.COM, and TBWA/Chiat/Day among its many agency clients. After hearing news of this acquisition, I’m left with a question: What do these agencies do now that @plan is owned by a media sales organization?

According to DoubleClick’s press release, @plan’s research capabilities “will form a foundation for DoubleClick to build a research division.” Sounds like a neat idea for DoubleClick, but it represents a fundamental conflict of interest to @plan’s existing agency clients, as DoubleClick sells ads on many of the sites measured by @plan.

@plan’s exit from the category via acquisition leaves a gaping hole in the online measurement category, one that must be filled. No one else in the category has as robust an offering in the realm of psychographic and purchase intent measurement as @plan did, and agency media planners need this data.

While I believe the @plan acquisition needs to be filed under “What were they thinking?” I think that the most recently announced DoubleClick acquisition is a winner. NetCreations, the leading email list management and brokerage firm, will be the next company to be absorbed into the online advertising behemoth.

According to the DoubleClick press release, NetCreations’ has more than 15 million double opt-in email addresses and grows at the rate of 50,000 names per day. The NetCreations acquisition will likely put DoubleClick into the number-one position among media sales organizations with respect to email marketing. This will also make it extremely difficult for any other sales organization to catch it. At the rate of 50,000 names per day, the database will double in size within 10 months or so. At that pace, DoubleClick will represent a good-sized chunk of the total Internet population.

Email marketing looks especially attractive for direct-response advertisers, given the decline in response rates for banners and such. While stand-alone messages to email lists can command a CPM in the $125 to $400-plus range, direct marketers pay for the better performance of email. According to the site, advertisers have seen initial response rates of up to 15 percent in some cases. It usually requires an expensive rich media campaign to achieve that kind of response rate in web advertising, so the advantage of email is often worth paying the extra money.

I think DoubleClick is batting .500 with respect to its last two power plays. Media research won’t be the same until something comes along to replace @plan, and I think we can expect to see some price adjustments with respect to email campaigns. Thankfully, this business is prone to these sorts of shifts in power, and the next round of acquisitions could significantly alter the playing field yet again.

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