Acxiom has quietly made a billion-dollar business out of handling data; it's a learning experience
Acxiom Corp. has always been good at managing data. Lots of data. By its own estimate, Acxiom manages more than 20 billion customer and prospect records.
"We do three things really well," says Alex Dietz, who's referred to internally as "products and infrastructure technology leader" and functions as Acxiom's CIO (there are no traditional titles in the company). Those three things, Dietz says, are managing large volumes of data; cleaning, transforming, and enhancing that data; and distilling business intelligence from the data to drive smart decisions. That data is used by Acxiom's approximately 1,000 clients for everything from developing telemarketing lists and identifying prospects for credit-card offers to screening prospective employees and detecting fraudulent financial transactions.
Nestled in the hills of central Arkansas, in and around Little Rock, an area still associated with names like Clinton, Whitewater, and the Rose law firm, Acxiom keeps a low profile but carries a lot of weight. Earlier this year, the company entered the billion-dollar club, recording $1.01 billion in revenue for its fiscal year ended March 31. Its list of blue-chip customers includes financial-service companies such as Bank of America, J.P. Morgan Chase, and MBNA America; retailers Sears and Federated Department Stores; and consumer packaged-goods makers such as Philip Morris.
But data collection comes with its own risks. Last year, Acxiom drew the ire of privacy advocates when it provided consumer demographic data to a little-known military contractor that was using passenger lists from JetBlue Airways Corp. to develop anti-terrorism software for the military. And earlier this year, Acxiom found itself in the spotlight when federal prosecutors indicted the head of a spam marketing company for allegedly hacking into Acxiom's system and stealing 8.2 Gbytes of personal, financial, and company data valued at more than $7 million.
Acxiom must show consumers that they get value from the data aggregator's information, says company leader, Charles Morgan.
Photo by Bob Stefko
Acxiom isn't the only company wrestling with the tough issues presented by consumer data: finding new ways to manage and extract value from increasing volumes of data, protecting that data against external and internal threats, and doing it in an increasingly privacy-conscious society. So how it's attempting to meet those challenges provides valuable lessons for other companies. "What we're really talking about is how information is used for the benefit of the consumer," says "company leader," or CEO, Charles Morgan. "We have to show consumers that they're realizing value from our use of their information and our clients' use of that information," he says, describing Acxiom's business model. "We need happy consumers for our customers to be successful." Acxiom's challenge: to ensure the mutual compatibility of that dynamic.
No one at Acxiom seems to know exactly how much data the company manages in its 11 tightly guarded data centers. The company's central data center is located north of Little Rock, in Conway, Ark., where Acxiom was founded in 1969 as a spin-off of a local bus manufacturer. Acxiom also has data centers in Downer's Grove, Ill., outside of Chicago, and as far away as Sunderland in the United Kingdom. The company recently opened a data center in Phoenix, and an additional facility is under construction in West Little Rock. The best estimates are that the Conway systems alone store between 1.5 and 2.0 petabytes of data, or up to 2,000 terabytes.
A portion of that data makes up Acxiom's information products, such as its InfoBase database of consumer data and its Personicx list of U.S. households segmented into 70 categories. Acxiom clients use those offerings to build marketing prospect lists, check the accuracy of names and phone numbers in their customer databases, and add demographic details or verify personnel data. Acxiom continues to add to its portfolio: In August, it debuted Personicx LifeChanges, a system that tracks U.S. households through life stages such as marriage or the purchase of a home. Those and other data products account for just over a fifth of Acxiom's revenue.
To build its data library, Acxiom collects information from a wide range of public and private sources. The company has property-deed-registration information from 930 counties across the United States, as well as 3,500 telephone directories. It also purchases data from private sources, such as catalog and magazine subscriber lists and research from consumer surveys.
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