Breach Brings Scrutiny

A data breach at a little-known entity that affected companies from J.P. Morgan Chase & Co. to TiVo Inc. is shining a light on the outsourcing of email marketing campaigns, a practice that has grown steadily over the past decade as consumers become less responsive to commercial pitches.

Epsilon Data Management LLC, a division of Alliance Data Systems Corp., said last week that hackers had accessed names and email addresses in its systems. In the days that followed, more than 40 companies—including J.P. Morgan Chase, TiVo and others—have said that their customers were among the victims.

The companies had hired Epsilon to manage marketing campaigns. When retailers such as Best Buy Co. and Target Corp. email promotions to customers, the likely buyers are often identified by and the messages are sent by firms such as Epsilon. Managing bulk mailings can be time-consuming and the technology to sort through customer information to come up with targeted promotions is often changing too quickly for businesses to do it on their own, experts say.

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