"Opt-in rules!"

How does 24/7 Media CEO David Moore target ads without raising the ire of privacy activists? He asks permission.

Published March 6, 2000 5:00PM (EST)

When online advertising giant DoubleClick suggested last month that it would merge its database of anonymous Web surfing habits with a database of names and other personal information it had recently acquired, it unleashed a firestorm. Privacy activists protested, the Electronic Privacy Information Group filed a lawsuit and the Federal Trade Commission opened an investigation. On Thursday, DoubleClick began back-pedalling furiously, and CEO Kevin O'Connor admitted the plan was a mistake.

But competitor 24/7 Media already has a database of about 20 million people's names and personal spending habits, which it sells to advertisers. And it hasn't provoked the suspicions of the FTC. David Moore, the president and CEO of 24/7, says the key to avoiding trouble is asking permission. 24/7 Media's information is based on opt-in marketing, and Moore, 47, who got his start in advertising selling ads for Turner Broadcasting and Lifetime Television Network, says his goal is to get everyone with an e-mail address to agree to receiving targeted e-mail and ads.

The FTC is investigating DoubleClick, your competitor. Are you concerned about an FTC investigation?

I'm more concerned with the way DoubleClick has handled themselves. For the leader of the marketplace to go and change its privacy policy -- that's not the way we'd do things. It has driven scrutiny of our industry, and privacy is definitely a hot-button issue right now.

We are part of the Network Advertisers Initiative, TRUSTe, all those organizations, that are working to try and craft a set of privacy guidelines. I met yesterday with Sen. Robert Torrecelli, [D-N.J.], who's crafted what's probably the most onerous privacy bill, to try and open the dialogue -- to see if there's a win-win situation. You won't see legislation on this issue tomorrow. We can come up with something that will do a good job protecting people's privacy.

What makes your business different from other ad networks?

We have the largest opt-in e-mail database -- people who have agreed to receive targeted advertising via e-mail.

Are you concerned about contributing more spam?

We don't do any spam -- it's all opt-in, and we're very conscious about not sending people too much e-mail. If you opt in, and I'm sending you a new advertisement every single day, you're going to say, "Get me out of here!" and we'll lose you. But if we send you an e-mail once a week, every seven to 10 days -- and it's on target, I'm going to have you as a customer for a long time. It's a delicate balance, but if they don't want the stuff they are getting, they can always opt out.

If we're not targeting properly, people are going to be irritated. But if you give them something valuable, it becomes a service, as opposed to an advertisement. Let me tell you, I got some e-mails around Valentine's Day that saved my skin. They sent me offers, I went and bought some stuff -- I was a hero!

How do you go about collecting these e-mail addresses?

Let's take FastWeb. This is a hot college site, we manage their e-mail list. So they ask their visitors, would you like to receive a newsletter each week, and learn about new updates to our content -- and would you like to receive promotions about products that we think you'd be interested in. That's how we get the addresses.

Are these separate options? Do you have to accept promotions as a condition of getting the newsletter?

We try to do both, but this is up to the individual sites. And the sites decide how they want to deal with us. In our 24/7 Mail Alliance, you contribute the data on a blind basis and we'll sell it along with the data from our other contributors. We own the data they contribute and pay them a royalty -- of the 20 million names, 11 million are in the alliance. The other 9 million we have a contract for, as the exclusive manager of the lists.

We also just acquired a company called Exactis, they send out a million newsletters a day to a list of users, so we also have those users now. Exactis also gives us a way to manage those users. Here's a theoretical example: Say American Express wants more users. We can do an e-mail and banner campaign to attract new cardholders.

Then we can say [to American Express], what would you like to do with them? And they say, we'd like them to take a trip, or to use their card at a restaurant. So then we can take those people who we know have American Express cards and serve them up different ads -- offer them additional services. We couldn't do this before -- we couldn't manage the customers in a discreet and secure manner before.

So can you target banner ads to these people?

Well, the people in our opt-in e-mail database have just agreed to receive e-mail. We have a separate database of Web site visitors, which come from our network. These are anonymous people, whose click stream [page requests] we track, using cookies. You can only target them by content, geographical location, browser type, that sort of thing.

So you can't target ads to individuals, right?

Not yet -- but we have a plan of systematically securing information about users who come into the network, so we'll be in a position to serve them ads based on their demographics. Obviously we'll do this in a way that will preserve everyone's privacy.

How will you do this?

There are basically two ways -- one, you have to make sure that the privacy policy is adhered to and make it available to consumers, and secondly, give them the option of opting-out if they don't want advertising targeted to them. I think we'll really try to educate consumers through our e-mail product to understand that if you're opting in for e-mail promotions, you might as well get Web advertising that's targeted to you -- it's to your advantage.

Can you make the assumption that if people have said they'll receive e-mail advertising, you can give them targeted Web advertising too?

Depending on how the FTC guides us, and the way the industry evolves in terms of privacy, we'll figure out some way. I don't know if we could make that assumption -- we'd probably do a re-affirmation.

Let's put it this way. If the government says that consumers have to opt into cookies, I think that would actually work pretty well, because every single Web site would put up a shield that says, "If you want our content, you have to take our cookies." Your users are going to think, "The Salon content is so important to me that I feel comfortable giving information about themselves -- how else are these guys going to make money?"

It's a quid pro quo -- if you want content for free, you have to give me information so I can sell you to an advertiser. If you won't even tell me if you're male or female, then pay me. I can tell you nine out of 10 people -- no, 99 out of 100 people -- will prefer seeing the ad to paying for content.

So you've got these two databases -- one of people who have agreed to getting e-mail, one of Web site visitors. Are you planning on merging the two?

We'd like to, but we'd secure permission from the consumer first. For instance, I could send an e-mail to 20 million people to ask them if they'd opt-in for cookies.

And we do have some user names in our Web site database already. We have a deal with a company called Naviant -- they do most online warranty registrations. When you buy a new IBM ThinkPad, you sign up on the Web so your warranty goes into effect, and Naviant will conduct the process and ask you if you want targeted Web advertising. If you say yes, they'll cookie you. So we have fairly complete profiles, with name and address, in the Web site database. But we're not targeting ads at individuals today. The new product we have will let you do this, though.

My goal is to get everybody in the world's e-mail address and get them to accept information about products targeted to them. That's a pretty big goal. If you aim a spear at the sun, you might hit the eagle; but if you aim at the eagle, you might hit the ground.

By Lydia Lee

Lydia Lee is a San Francisco writer


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