Something less than five years ago Kevin O’Connor started chatting up some business friends about a dream.
The dream was that, instead of football fans seeing tampon ads or old ladies seeing ads for Playboy, people would see only the offers they might respond to.
The clutter would be gone, they’d be more likely to pay attention, the ads would provide real service, and the advertisers would pay a premium price for what had been run-of-network stuff.
This was the genesis of the DoubleClick Network, now one of the most valuable franchises in the advertising business. DoubleClick today is worth over $8 billion. That’s not too shabby when you consider that the giant Omnicom Group, the parent of so much alphabet soup (BBDO, DDB, and TBWA Worldwide), is worth about $15 billion.
DoubleClick’s database is built on cookies, anonymous placeholders tagged to browsers that can then be used to trace where those browsers browsed.
The cookies don’t know who the people behind the browsers are, but if the cookie reported a browser went regularly to Nick.com, then CBS Sportsline, and then XXX.Nastynastynasty.com, the database might guess you were a male parent with an active fantasy life.
Kevin really scored a coup last year when he acquired Abacus Direct for $1.7 billion in stock. Abacus’s database of catalog transactions, unlike the cookie database, does include names and addresses.
Imagine putting the two databases together on behalf of our imagined browser. No more would a Baptist preacher be bombarded with ads for rum, gambling, or the charms of unvirtuous women. (Unless, that is, he’d secretly bought a movie from Adam & Eve, or visited some sex sites late at night when he was stuck for a theme on Sunday’s sermon.) Not only that, but Kevin knows who the preacher is, and where he lives.
You see, by tracking what people really do, not what they say they do, and (more importantly) by knowing who they actually are, DoubleClick is doing two things many feel are terrible. It’s engaging in explicit targeting, and it’s building dossiers on people. That’s a tremendous service to marketers, but it’s pretty hard to explain to the preacher’s wife.
As a result, some hard questions are being asked about the fruits of Kevin’s dream. Last Wednesday, DoubleClick told the Securities and Exchange Commission that the Federal Trade Commission is looking into how it collects and passes around data.
The attorney generals of Michigan and New York are seriously looking into filing their own suits, and six private suits have been filed, some of which have already attained the dreaded “class action” status.
The question now becomes will Kevin’s dream turn into a nightmare? Did he cross a line in merging offline and online data? Is there something explicitly wrong with explicit targeting? Might Kevin’s data now be leaked to the press (or subpoenaed by police) to ferret out hypocrisy in high (and low) places. (“Mr. President, I’ve found your cookie.”)