Experian to help email marketers

Fresh from its failure to provide secure online credit reports, credit bureau Experian is teaming with two other companies to create a massive marketing database that critics say will only create more bulk email.

The EHI project is jointly run by Experian, Harte-Hanks Direct Marketing, and International Business Lists and has two goals: develop a database for companies looking for online customers and build an Internet "white pages" directory. Inclusion in both databases would be voluntary, according to the EHI program director Ian Oxman.

Oxman said the project will also help curb spam by providing a clearinghouse of antispam information, including pending legislation and links to members of Congress. But he acknowledged that it will take more than his project to stop spam.

"This doesn't create an end to spam," Oxman added. "You also need technology like filters, legislative solutions, and business model solutions. We're trying to create the business model solution."

However, one critic argues that the system will in fact increase the amount of junk email. "Experian [and its partners are] going to start generating bulk mail where it did not exist before," said Robert Costner of the online advocacy group Electronic Frontiers Georgia.

Experian is the credit bureau of the former TRW. Two weeks ago, it launched a service to let customers check their credit reports almost instantly on the Web but had to pull that offline less than 48 hours later. A software glitch was sending confidential reports to the wrong destinations. (See related story)

The project targets end users through their Internet service providers. The plan is to have ISPs sign their subscribers up for the marketing database, giving the providers a small percentage of the revenue generated by the subsequent direct email advertisements. Once signed on to the project, Net access companies must agree to "actively communicate the EHI program to all users and encourage their participation," according to the latest version of the proposal, which Experian posted on its Web site this month.

If an ISP joins the project, its subscribers would not be automatically enrolled in the marketing database. They would have to go to a separate Web page and enroll by choosing product categories of interest. However, participating ISPs would automatically register subscribers in the white pages unless the subscriber specifically opted out. Oxman imagines a dialog box during the setup process warning users they are about to be entered into the white pages directory.

Oxman also promises that the system would not collect wide-ranging personal data. A user would submit more than his name and email address only when registering a business for the directory service. In that case, Experian says it would resell the expanded demographic information, but marketers using the database would have access only to the categories selected by subscribers. The marketers would then send the email to EHI, which would redirect it to the appropriate end users.

So far, Prodigy is the only ISP that has agreed to participate, Oxman said. Two ISP consortia, the ISP/C and the Texas-based TISPA, have signed off on the plan, but their member ISPs still must agree to participate.

One consortium director who has not signed off on the plan agrees in principle that direct email marketing needs to be refined.

"You're not going to stop direct electronic marketing for two reasons: Most legislative bills introduced on the state or federal level are unconstitutional because they limit guaranteed speech, and also, whether or not you like it, spam works," said Dave McClure, executive director of the Association of Online Professionals, which includes approximately 600 large and small ISPs. "Since it's going to occur, [consumers] will benefit if it's appropriately controlled."

McClure stressed that his organization has not endorsed the EHI plan. He also pointed out that his organization's Web site already provides the same sort of antispam clearinghouse that EHI envisions.

Despite the EHI's method of letting users "opt in" to the marketing database--meaning they would only get mail from participating companies if they request it--one privacy advocate expressed skepticism.

"This raises concerns about converting information about you on the Internet for commercial purposes," said Evan Hendricks, editor of the Privacy Times newsletter. "Personally, I wouldn't enter info about myself in that system. It's a bad privacy move."