U.S. portal is turning to online and direct marketing shop MKTG Services
to represent its online and offline lists, in a bid to glean as much revenue as possible from its user base.
Through the arrangement, New York-based MKTG — formerly known as Marketing Services Group Inc. — will serve as the exclusive rep for Lycos’ e-mail and postal database files, which include records on 5.2 million and 3.3 million opted-in users each.
Waltham, Mass-based Lycos generated the lists through the various sites it maintains, including Gamesville.com, Tripod.com, Angelfire.com, Lycos Finance, FoxSports.com, and HtmlGEAR.com.
While the lists do contain some voluntarily provided demographic data, MKTG said the files would be updated using its “expanded overlay” capabilities, which append more detailed demographic, lifestyle and ethnic data to profiles.
The agreement marks the first time that the two lists have been made available to clients of Lycos’ direct marketing services practice.
“MKTG has developed a proven track record in monetizing valuable data assets through their proprietary marketing methods and channels,” said Dean Macchi, director of direct marketing services at Terra Lycos. “The addition of an enhanced Lycos customer list will add the opportunity for all advertisers to follow-through on advertising campaigns through customized direct relationship marketing. We are committed to making all Lycos sites the most compelling choices for advertisers who desire to achieve a high return on their investment, while providing highly targeted and useful information to our members.”
The move marks the latest effort by Terra Lycos to beef up the marketing dollars coming into its online content business, which has been hard hurt by the Internet advertising slump — while its telecom division similarly continues to lag, with slow broadband growth in Europe.
The Barcelona-based ISP and portal player, formed through the October, 2000 merger of Lycos, Inc. and Terra Networks S.A., posted disappointing numbers last week, with revenues coming in below expectations at about $162.2 million. Terra Lycos also posted a pro forma loss of about $31.7 million, and executives reduced full-year revenue guidance by about $110 million.
Worse still, that figure assumes that Lycos maintains its relationship with Bertelsmann, with whom it’s had an advertising contract since May, 2000. The agreement has Bertelsmann — which accounts for nearly half of Lycos’ online ad revenue — paying up to $675 million over three years, starting in October.
But in April, the German media conglomerate said it was looking to decrease the sum it would pay, in light of the steep decline in online ad pricing since the deal was signed. Sources close to Bertelsmann say no final decision has been made as of yet. The Germany company has recently been undergoing its own strategic shifts, marked by the departure this week of CEO Thomas Middelhoff, who was an advocate of Internet ventures.
Meanwhile, MKTG Services continues its moves to bounce back from a series of major restructuring moves during the past two years. In September, 2000, the company shuttered its e-mail marketing software unit, WiredEmpire. Six months later, it also shifted executives and closed Pegasus Internet, handing the unit’s e-mail list representation business over to MSG Direct. Earlier this year, the company finalized a name change.
“With its extensive unique user base, Lycos has amassed one of the most comprehensive data files in the world,” said MKTG Chairman and Chief Executive Jeremy Barbera. “The Lycos service contract is a strong validation of our services and reputation within the marketing services and relationship marketing industries.”