Epsilon Drops DiGuido, Restructures

Who knew the e-mail marketing industry could be so tabloid? Rumors of phantom bloggers and execs being hustled out the door are wafting up from the otherwise dry news of marketing services firm Epsilon’s restructuring.

Alliance Data’s Epsilon unit has dropped the Epsilon Interactive brand used by its e-mail services branch and reorganized its services under the blanket Epsilon name. The reason for the new set-up, explained Epsilon President and CEO Michael Iaccarino, “is to better serve our clients in a more integrated fashion,” and to form “one external brand.” According to Iaccarino, more than twenty clients currently use both Epsilon’s and the newly-modified Interactive branch’s e-mail services. They include Barnes and Noble, National Geographic, Midas and Purina.

Perhaps the most startling news for the industry is the reported firing Tuesday of e-mail industry veteran and Epsilon Interactive’s president and CEO, Al DiGuido. DiGuido had been with the firm for just over a year since Epsilon acquired Bigfoot Interactive, where he served as CEO. DiGuido is a contributing expert columnist for ClickZ. Calls to DiGuido by ClickZ yesterday went unanswered.

“Al was a terrific leader for the interactive and e-mail business,” commented Iaccarino, adding “I won’t get into reasons for his departure.”

“Al’s a big name,“ observed Bill McCloskey, CEO of e-mail research analytics firm Email Data Source. “It certainly comes as a surprise, how quickly it happened and the way it happened,” he commented. “People in the industry were caught unawares.”

Iaccarino confirmed in addition to DiGuido, three non-senior executives are also “no longer with the company.” Those staffers, whom Iaccarino refused to name, had no external activities and did not have relationships with Epsilon clients, he said.

Epsilon is now segmented into four divisions, Epsilon Interactive Services, Agency and Direct Services, Strategic Database Services and Data Services. Epsilon Interactive CTO Ragy Thomas was promoted to head up the Epsilon Interactive Services group as president; the division will handle the firm’s e-mail and interactive offerings. David McRae was named president of the pre-existing Agency and Direct Services division. Epsilon COO Bryan Kennedy will lead the Strategic Database Services group.

As a result of Epsilon’s recent acquisition of CPC Associates, the data provider’s CEO, David Thornbury, is expected to be named president of Epsilon’s Data Services group once the deal is closed.

In discussing the CPC purchase, Iaccarino explained, “One of the gaps in our offering was we didn’t have a data product. The key difference to [CPC’s] data file is they have the definitive new mover file in the marketplace.” The data firm collects regular updates on physical addresses from 400 sources, according to Iaccarino. Epsilon hopes eventually to merge CPC’s physical address information with current e-mail addresses, something Iaccarino described as “a technology challenge” at this point.

There will “absolutely not” be any staff reductions as a result of Epsilon’s reorganization, Iaccarino told ClickZ News. He said the firm will “absolutely” continue its buying spree, noting, “We’re looking at the right companies that don’t just make [Epsilon] bigger, but really make sense in the marketplace.”

Last month a short-lived blog written under the nom de plume “Pal Dodido” reportedly had the e-mail industry abuzz with posts from a self-proclaimed “King of E-mail Marketing.” The blog’s author boasted of fooling venture capitalists and analysts into over-valuing a firm that is thought to be Bigfoot Interactive. Iaccarino asserted the mysterious blog “had absolutely no bearing on” DiGuido’s departure from Epsilon.

Iaccarino also disputed reports that Epsilon’s DoubleClick e-mail business has been losing clients since it was acquired in February. “Nothing can be further from the truth,” he stressed, admitting, “There were some culture issues between DoubleClick and the Bigfoot team.” Continued Iaccarino, “I can tell you that Epsilon and all of its business units is exceeding its revenue and operating profit targets.”

Earlier this week, enterprise management software outfit BMC Software chose Epsilon as its direct marketing agency of record.

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