DoubleClick buys FloNetwork

With its announcement last month to purchase Toronto-based outbound e-mail service provider FloNetwork, U.S. online advertising powerhouse DoubleClick significantly increases its presence in Canada - all the while widening its leadership position in the North American e-mail marketing space. ...

With its announcement last month to purchase Toronto-based outbound e-mail service provider FloNetwork, U.S. online advertising powerhouse DoubleClick significantly increases its presence in Canada – all the while widening its leadership position in the North American e-mail marketing space.

The stock and cash deal, which enables DoubleClick to gain some serious e-mail marketing muscle, comes at a time when more and more North American companies are beginning to build permission-based e-mail plans into their marketing strategies. The appeal of permission-based e-mail marketing lies in its low cost, the speed with which it can be delivered and responded to, and finally the high response rates it tends to generate.

According to U.S.-based Internet research firm Jupiter Media Metrix, the number of unique e-mail marketing messages is expected to grow from three billion in 1999 to 268 billion in 2005. And in the U.S., a survey of 50 e-mail marketing managers by Cambridge, Mass.-based Forrester Research found they planned to triple their e-mail marketing spending by 2004.

The acquisition, which is still subject to shareholder and Canadian government approval, ultimately combines the two companies’ strengths in targeted banner advertising and e-mail messaging, says Reggie Brady, vice-president of strategy and partnerships at FloNetwork.

‘When we combine the strengths of the two companies – even just focusing on e-mail alone – we’re going to have a killer offering,’ she says. FloNetwork, with a roster of Canadian clients including Chapters Online, Trader.com, Globe Interactive and Microcell, provides the technological infrastructure, software and services for businesses to launch targeted – often personalized – e-mail campaigns.

Its 220 workers based in Toronto will likely remain there, says Brady, adding that in fact, the strong Canadian presence – and the favourable economics of maintaining operations in Canada – was probably particularly attractive for DoubleClick.

‘We go from our merry band of 15 people,’ confirms Wendy Muller, president of DoubleClick Canada, ‘to well over the hundreds at this point.’

But it’s the duo’s ‘leap through the e-mail technology stratosphere’ that excites her most, she says.

According to Court Cunningham, vice-president and general manager of DARTmail Technology at DoubleClick, FloNetwork complements DoubleClick’s existing technology offerings – namely DARTmail, DoubleClick’s e-mail marketing technology solution – with features like its Asian character support, triggered e-mail support and forward tracking, to name a few. Launched last October, DARTmail uses industry standard DART (Dynamic Advertising Reporting and Targeting) technology to serve dynamically targeted ads into text and html e-mail.

DoubleClick, which currently

targets online newsletter publishers, direct marketers and list managers/brokers with its e-mail technology, is setting up plans to integrate the two e-mail products into one universal e-mail solution, Cunningham says. It’s a plan the companies hope to begin executing as soon as the deal closes in the second quarter of this year.

In many ways, FloNetwork was a little late to the table in terms of e-mail marketing services, says Brady, comparing the company to rivals Digital Impact, Message Media and ClickAction. ‘We’re outstripping them in terms of growth, but they’ve been at it a couple more years. While we have been becoming a leader in the marketplace, from a thought-leadership point of view, this deal makes it a physical reality. Combined, we will leap-frog over those competitors,’ she claims.

Client efficiencies will also be evident in other areas, she adds. While DoubleClick remains a giant in the ad serving, ad sales, banner management and Internet marketing space, it has also recently made major inroads into list management and brokerage.

‘List management and brokerage is another complementary business-to-e-mail marketing [service]. And it’s one that we’re hearing more and more about from clients who would at least be interested in seeing how we could complement what they’re already doing in the acquisition arena,’ she says.

‘That’s just another synergy that will obviously be looked on favourably by our existing customer bases.’