By Nick Patience
Flycast Communications Inc yesterday announced an email direct marketing system called eDispatch in its latest attempt to differentiate itself from the two largest web advertising networks, DoubleClick Inc and 24/7 Media Inc
The San Francisco-based company plans to apply some of the networking, management, and marketing techniques built up through web advertising to the much older medium of email advertising as ad networks try to do more than merely serving up banner ads. Flycast’s current network comprises about 1,100 web sites and it claims to reach more than 40% of the entire web audience. Its focus is on the web advertiser, rather than the publisher.
Flycast claims that current email direct marketing initiatives, such as they are, are too fragmented, which leads to inefficiencies. It wants to create a new network of email marketers and will start with its 1,100 web advertising customers. The eDispatch system will serve text or HTML ads into email newsletters and offer centralized campaign management from the Flycast web site.
In the first quarter of 2000 the company will also start to offer permission marketing technology that will provide advertisers with the ability to offer users opt-in mailing lists, which Flycast will aggregate. At the same time it will also begin to use the sales forces of the various Yellow Pages companies with which it has relationships, to target small businesses that want to do local direct marketing through email. And in the second quarter Flycast will work with other outbound email marketers to provide advertisers with customer retention and relational management products.
This plan would seem half-baked, as VP business development and company co-founder Larry Braitman was unable yesterday to give much idea of the scale of the opportunity for Flycast, other than to say that it will start with its existing customer base – only some of which use newsletters – and go from there. Likewise Braitman could not talk about any email marketing companies with which it currently has deals, other than to say there will be more than one and a number of targeted lists assembled or bought in.
On the question of consumer acceptance of intrusive email ads, Braitman says he hasn’t heard of a lot of resistance so far, which makes us wonder why this hasn’t been done before given that email is almost 20 years old. He emphasizes that consumers should be given the option of opting out – presumably that will be their only option before the company launches its opt-in services – but he says ads are the price you have to pay to get content.
Flycast, which went public in May, used to offer an auction-based system to web advertisers to buy ad space from publishers using its software tools, but abandoned that idea and brought in new chief executive George Garrick in May 1998 and relaunched the company last October. Flycast recorded second-quarter net losses of $6.2m on revenue of $6.4m, which represented a 38% rise on revenue from the previous quarter. Yesterday’s news was good for a $2.1875, or 10.6% hike in Flycast’s stock yesterday which closed at $22.75.
