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Major data breach to have "major repercussions" for marketing industry?

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6th Apr 2011
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A major data breach at permission-based email marketing services firm Epsilon could have "profound repercussions" for the marketing industry, a security software firm has warned.

The incident, which Epsilon said in a statement took place on 30 March, exposed "a subset" of the customer details of major brands, including JP Morgan Chase, Capital One and TiVo, following "an unauthorised entry" into its email system.

The company claimed that the information taken was limited only to email addresses and/or customer names only, but MSNBC reported that a spokesperson for Marriott Rewards said that "email addresses and member point balances" had been revealed. Many of the affected companies also sent out messaging warning their customers to be on the look-out for phishing emails and spam.

But Jeff Hudson, chief executive of digital certificate and encryption key management software provider Venafi, warned that Epsilon might not be the only company to suffer potential “reputational impact and damage on their brand” as a result of the breach.

"Let’s put that simply: if your favourite supermarket chain admitted that your opt-in details had been lost, you probably wouldn’t feel good about it. You might even switch your loyalty for the goods or services concerned to another brand," he said.

But the situation also called into question the increasingly popular trend towards outsourcing customer data to third party and specialist marketing firms, Hudson added.

"This incident will probably trigger a rash of consequential data privacy amendments to the contracts of these firms. This will almost certainly result in more complex service level agreements for these types of services," he said. "This case, though relatively simple on the face of it, could have profound repercussions for the marketing industry and the security of client information."

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By wrapmail
06th Apr 2011 12:38

 There's no doubt that email marketing works but the mass emails firms are vulnerable as proven by the latest breach. In addition to the traditional email marketing (mass email) one should look at another marketing opportunity and that is the emails we all send from our corporate email addresses every day. I represent a company that has developed a solution for just those emails and thus this post.
The basic idea behind wrapmail is to utilize the facts that all businesses have websites and employees that send emails every day. These emails can become complete marketing tools and help promote, brand, sell and cross-sell in addition to drive traffic to the website and conduct research. Wrapmail is available for free at www.wrapmail.com

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