How are you "branding Claritas and how is it positioned for the future?
In answer to your question about how we are branding the company, it is more of a marketing information company.Total solutions? Yes, we'll provide total solutions but we'll also let people use our marketing information in their solutions in the marketplace.This is because the Claritas information is the common currency for two main applications in the marketplace: the site market analyses, which also include ad sales as well as customer targeting. So that means you've got to be open with our information to let other people use it in their applications.So that when a retailer is talking to a manufacturer or an agency is talking to an advertiser about a customer, they are using the same language or the same common currency, and that is Claritas information.
Are you differentiating yourself on a total solution, but data is
the primary revenue generator?
Again, it is information; it is not just raw data, because we add a lot of intelligence to the raw data to make it more actionable.But we do offer solutions and we will compete in situations against other providers. We have resellers that we compete with.We have resellers that sell our data in their applications that we compete with.
I would think that this type of situation makes it a difficult business
model to maintain.You can easily get squashed in the middle because I
am not really a total solution provider and sometimes I'm competing against
the people that I think I am selling to.
I disagree.We do provide a total solution, but all I'm saying is that if our total solution isn't the one that the client chooses, that should not preclude them from using our information in their solution.
It seems like the number of demographic data provider is getting
smaller, mostly at the hands of the VNU acquisition strategy.The acquisition
of the CACI Marketing Information group by ESRI seems to be one where Jack
Dangermond is taking a stand.Do you perceive this move as a major threat?
There are still the same number of people that manufacturer demographic data so it really has not shrunk the market.I take any competitor seriously. Where we compete with CACI has traditionally been more on the lower end of the site and market analysis as opposed to the customer targeting and acquisition side.And we continue to evaluate their offerings and compete with them.Is it anymore of a threat than it was? Probably not because CACI was a partner with ESRI.All it did was formalize that partnership, so there is really no difference in the product offering in the marketplace than what was already there.
I am thinking more from the standpoint of being a more potent solution
provider now.ESRI can reach into more of the government market with a
specific product offering.It seems like they want to take this data game
a little more seriously.
I think it is the other way around.They own the government market, the education market.They are looking to get into more of the business applications and the private market and that is where CACI is the lead. ESRI was selling BusinessAnalyst with CACI data.
Obviously, VNU has a great cadre of companies that are complimentary
in nature.Is this something that executives at VNU want to do to provide
more customize solutions? Explain more about how you work with the other
VNU affiliate companies.
We work pretty closely.We are an information provider to a lot of the companies and we use a lot of their information and integrate it into our solutions.If you look across the spectrum of VNU companies, Spectra uses our data and offers that to the consumer package goods (CPG) industry. We provide information to Solucient that uses it to go after the health care market.The media measurement companies, Scarborough, AC Neilsen use our information in the media measurement information they provide.There is an entertainment group that take our information to that market.We then use their information in our tradition markets; the financial services, communications and energy, retail and restaurants [except CPG], real estate.We use the Scarborough information in our offering; we use the Neilsen NetRatings information; we even use the Solucient Health Care and Hospital and disease incident data in our product offerings we have. So it is really a very beneficial, two-way relationship with a lot of the VNU companies.
Is Claritas allowed to present the product offerings from the other
Not the offerings.We incorporate their information into industries we serve.The way that VNU breaks the company is really by the industry or the vertical market they are serving.Claritas will not go sell to a CPG manufacturer.We provide the information to Spectra to go after that market.Just like Spectra will not go into a bank and take our information to them.Spectra will however resell our products to a super market chain or mass merchandisers.
What is your product strategy both online and desktop?
Our SiteReports.com is THE most successful site reporting system out there.And that is a very low cost system with very high technology.You can go into any geography with any shape whether its radius or polygon and generate site reports.You can either charge it to a credit card on a "per drink" basis or you can buy a subscription."iXpress" is a desktop product with a proprietary data structure with a very small footprint that does more analysis than SiteReports.com, but is not a 'high end' product."iMark" is a desktop client server that is a very sophisticated system, and "iMark Online" which is a thin client distributed system for publishing information in an enterprisewide environment."iModel" is a desktop system where you can build models.
What is the current status of customer segmentation applications?
Is this a growing market?
It is a growing market.We have several segmentation products.The traditional geodemographic products, PRIZM and Microvision, are general applications for consumer segmentation and targeting.We have a product called "P$YCLE," which is a household level segmentation system specific for the financial services industry.We also have a household level system called "ConneXions" which is a system designed specifically for voice, video, and data.We've seen very significant growth in Connextions, which was introduced last year; and P$YCLE continues to grow in the marketplace, and that was released way back in the early 1990's, as the standard for financial services companies.
How are you packaging iModel, given that it is hard to calibrate
models for retail sites selection?
IModel is a delivery platform for a custom developed model.Claritas for years has developed custom models for clients for site analysis.This is a way that we can deploy these models to them so that they have an easier way of running those models.It is not a standardized, one-size fits all model that every body gets.With this platform, we develop a custom model which reflects the uniqueness of a company's business, both in terms of trade area definition and the variables that drive the success of their site, and allows them to run that model themselves.
Is seems that Claritas is able to create a very robust retail model,
given that it can pull information from all of the VNU affiliates.Many
of the arguments against some retail models revolve around the lack of
an accurate way to calibrate the site selection model, especially those
that are developed without sales information from competing stores.Can
Where do the sales data exist? It is mainly from AC Nielsen for fast moving consumer goods, so when you are developing models for super markets and drug stores you have sales data.Our affiliate Trade Dimensions; they have the gross volume of every super market.As far as a retailer or restaurant chain, there is no database that measures the total number of hamburgers sold in a geography or total number of men's slacks sold in a geography.So, what we have to do is use our information to estimate that with a combination of our segmentation and survey data.What we would love to do, and now that AC Nielsen as been purchase by VNU, we're talking to them about the possibility of expanding the Homescan panel to include consumer durables, as opposed to just fast moving consumer goods, so that we would be able to apply that data into the modeling.
How will Microsoft change the delivery mechanism for demographic
The whole issue there is that Microsoft really wants to be a tool supplier. I'll put it in the context that Kodak had with Microsoft.While they are providing the tools, Kodak is really the application that develops the picture.Well Microsoft was insisting on, since it is their operating system that they should get a share of every time Kodak developed a picture.So, that is what is playing out in the demographic industry.It is the same thing.
When I interviewed Microsoft MapPoint executive Michael Graff about
how they would solve the problem of updating stale data, you was "tight-lipped."
Can you comment any further on this situation?
All I can say is that Claritas has invested heavily in an enterprise data repository.As soon as we update a piece of information, it is available, whether it is through one of our commercial websites, such as MyBestData, or Claritas data exchange.We can make the information available to our clients almost instantaneously.It is yet to be seen what Microsoft will do.
That is the impression I got.Their .NET strategy is all about delivery
Their Microsoft's .NET strategy basically is that, they tell me, all they want to do is develop tools so that people can build applications.They're going to make all their money, they say, on the tools.They don't care about the data, but they basically want to give the data away to everybody for free or if they charge for it, they want the money!" So, I told them, that imagine if I wanted to sell my data and give everybody a free copy of Excel.How would you feel?