Acxiom Corporation

The Acxiom River Market Tower is a twelve-story corporate office building just south of the River Market in downtown Little Rock. Photo by Phil Frana.

The Acxiom Corporation is a public corporation headquartered in Little Rock and Conway, Arkansas. Acxiom specializes in data mining, business databases, grid computing, direct marketing technology, and customer relationship management software.

Company Origins

The company owes its origins to Ward Industries owner Charles Ward. Ward was the son of David H. "Dave" Ward, a blacksmith turned school bus manufacturer at Ward Body Works in Conway. In 1959 he walked away from his undergraduate studies at the University of Arkansas at Fayetteville, and instead began learning the manufacturing business at a satellite Ward plant his father had built in Austin, Texas. The company passed into the son's hands in 1968.

In the 1960s the company began an innovative program of computer-aided manufacturing and inventory control with IBM 360 mainframes. Ward exploited this experience gathered in the data processing department of the family bus company to found spinoff Demographics Inc. with brother Stephen Ward in November 1969. The immediate objective of Demographics was to meet the urgent mail list processing needs of the Young Leadership Council for the Democratic Party. The Democratic Party, long the dominant political force in Arkansas, had found a fierce competitor in billionaire New York transplant and Arkansas governor Winthrop Rockefeller, who rejuvenated the struggling state Republican Party with a formidable campaign organization and new data processing machinery for political mailings.

Ward, at the time immersed in party politics as Arkansas' Democratic National Committeeman, rapidly grew the system for use in the successful gubernatorial election campaign of Dale Bumpers over Governor Rockefeller, the victory of Bill Alexander over challengers in the state's 1st Congressional District and in the failed 1969 Democratic presidential bid of Hubert Humphrey, who was defeated by Republican Richard M. Nixon. He also provided list processing, analysis, and consulting services in the failed draft movement of U.S. Representative Wilbur D. Mills as a potential candidate in the 1972 Presidential campaign. Demographics supported more than seventy Democratic candidates in other races in 1972. The company even had computers installed in the basement of the Watergate Building, which burglars failed to mark as a target during the infamous June 17, 1972 break-in by campaign staff members working under Nixon's directive. Acxiom also provided assistant to Lloyd Bentsen in the 1975 Presidential campaign.

The company attempted to diversify its client base by accepting data processing jobs from local Conway businesses "no matter how small." One of the earliest customers was the bus company itself, which in the 1950s processed its own inventory, payroll, financial records on an IBM 402 Accounting Machine and after December 1, 1966, on an IBM 360 model 20. The company also secured a contract with local utility provider Conway Corp to process customer billing statements. Another early client was Conway's Nabholz Construction. More than fifty businesses contracted a variety of data processing services by 1974.

Entry into Direct Mail Business

The company was still largely a printing business, as data processing jobs exited the company's spartan metal building not over telecommunications lines but from a loading dock. The company occupied a 6,000 square-foot building housing an IBM System/370 Model 135 mainframe computer and press near the present Smitty's Bar-B-Que on Harkrider Avenue across from the main bus plant. Revenue had trebled from $388,000 in 1971 to $1.2 million only four years later. The company had over thirty-five full time employees, many hired away from the bus plant and still card-carrying members United Auto Workers. Demographics and Ward Bus drew from the same leadership pool. Both companies were organized under the umbrella corporation Ward Industries and had identical members serving on their boards of directors.

But then a perfect storm of technical, political, and other business challenges blew into Conway. Taking on the diverse data processing needs of local businesses stretched the expertise and data processing capacity of Demographics to its breaking point by 1975. The situation was complicated by changes in Federal Election Commission rules after the Watergate scandal, which "put a damper on" the company's political business. Then one of Demographics' most lucrative and only year-round sources of business, the Hot Springs land developer Diamondhead, folded. Employee salaries were slashed dramatically and ten employees lost their jobs.

In a seismic shift in leadership Charles Ward divested himself of Demographics in the midst of his own personal financial hardship. Mostly unrelated to the ongoing work of the small data processor, Ward had gambled his company's future on a new bus plant in Beaver Falls, Pennsylvania. The plant failed to thrive. Ward Bus Manufacturing eventually went into Chapter 11 bankruptcy. In the divestiture Charles D. Morgan, an IBM-trained systems engineer and Demographics vice president since 1972, became the new president and CEO of Demographics.

"Like a lot of people in this business, I didn't exactly set out to do the job I do now," recounts Morgan. "My undergraduate degree from the University of Arkansas was in mechanical engineering. In the mid-60s, when I went to the university, there was no such thing as software engineering, otherwise I would have done that. My wife calls me a geek because I'm very much of an engineering frame of mind. But I did acquire business acumen along the way." Morgan's grandfather has been a successful Fort Smith, Arkansas, construction materials supplier, hardware wholesaler, and motel owner. This business passed to Morgan's father who "worried about things like sales, profits and borrowings," said Morgan. "[I]t helped a lot that I grew up in that environment."

Morgan moved over to Demographics from IBM when a tendered promotion promised to take him out of the state. Morgan's pool of employees included some old friends. He'd known Rodger Kline and Jim Womble since college and they'd worked together at IBM before leaving for Demographics. Wombled remembered that their IBM training "really served us well." Kline noted that Morgan was a master at convincing others to "work hard, enjoy it, have fun, and be successful." (More than fifty percent of early executive leadership remains with the company today.) But none of these ex-IBMers really expected to build more than a $10 million dollar business.

Morgan perceived in the wreckage of the old Ward Industries an opportunity to mainstream the mailing list technology developed for Demographics' original political customer user base. He encouraged company employees to reevaluate its dependence on ordinary data processing services, which provided small margins, and big political jobs that encouraged a culture of feast or famine. "If the candidate won, we might get paid. If they lost, don't even think about it," remembered Jim Womble, a systems analyst and sales manager at the time.

Hunting for inspiration and a new business plan, Morgan began prospecting in the direct mail industry. "I started calling some people in the mailing-list industry, and I guess I never realized what a big business it was," recalled Morgan. Soon Morgan was traveling to Greenwich, Connecticut, to meet with David Florence, an old friend and CEO of Direct Media Inc. Direct Media was the maker of Yellow Pages directories across the nation, and in touring the back rooms of the company Morgan quickly recognized that something was amiss. Everywhere he looked employees were manually compiling new Yellow Pages directories. "It was just a zoo," Morgan later remembered. "People were running around with stacks of these orders and these mailing lists. People were trying to find ones that were lost. It would give you a nervous stomach in about five minutes." Morgan explained to his friend that there was a better way to compile the lists. "I said [to myself], [h]ere is an opportunity," Morgan recalled. "Computers could do this a lot better."

Returning to Conway, Morgan encouraged employees to work nonstop on a solution to Direct Media's problems. Within two weeks the company had sketched out what has since been recognized as the nation's first fully-automated, online system for generating mailing lists. The entire programming job took nine months to accomplish. The solution became known as the List Order Fulfillment System (LOFS), with Direct Media as the sole customer.

The production order cycle for fulfillment orders on what came to be called the "CCX Network" followed a few basic steps: First the order was entered into the computer and print order edit copies produced. Then came selection: Operators ran a generalized pickoff once a day for all fulfillment files, analyzing and picking for selection all list orders in what was called "released" or "approved" status. Up to eight hundred orders were selected for a particular file in any single cycle. The computer then indicated to the operator which magnetic tape reels to mount and performed an automatic check to make sure the correct reel was mounted. During this process, the order remained in "selecting" status, and could not be changed. As the necessary reels were mounted and "read" by the computer, the records for all orders selected in the cycle were picked off. If the order required a cross section, the entire universe would be selected. The status of the order then changed to "selected."

The next step in producing the order was to sort all the selected names. When the sort took place, the cross sections were calculated for all orders requesting that process. Only the maximum number of names ordered was kept. Then the computer compared the selected quantities with the quantities specified in each order. If the quantity was not within acceptable limits, the computer flagged the order and "held it for count review." The order then went into what was called "counts?" status.

The status of all operator orders became available each morning by means of a printed status report. Operators had to take care at this point to review the status of each order and make sure that the next step in processing would generate the appropriate output. Bad orders could be revised or canceled at this point. If the operator approved the order it next was processed through a program called the Output Generator. The Output Generator created magnetic tapes with tape layouts and dumps. Information for table and card output was formatted into the actual printed image and saved on a spool tape for printing later. All required count reports were then generated and a copy of the order and the shipping labels were printed.

As the Output Generator produced each order, it updated the status of that order to "produced." Orders needing special handling were placed onto a separate magnetic tape. As soon as the Output Generator finished running the orders, the computer printed cards or labels from the spool tape.

The programming of LOFS and the Direct Media account represented a turning point for the company. Old employees were hired back and salaries were restored to their old levels, and the company began to grow again. "It gave us a niche in the national market and put us on the track for building and marketing databases, data warehouse, and data content, noted Morgan. "We continued to win new business because of LOFS and the technology around it," Rodger Kline said. "It was the only on-line fulfillment system for direct marketing."

Three years later the company began building its first comprehensive "marketing database" atop LOFS technology for the American Management Association, an organization providing business executive training. The completion of the database made it possible for the company to begin advertising what it called the personalized "computer letter" and its niche as a one-stop shop for direct mail services. Here "a computer is used in advertising as effectively as a bank uses one to compute your financial statement."

In mid-1970s advertisements the company touted computerized direct mail as a unique form of "selective mass communication." Business-to-business customers had control over the particular audience segment they wished to address, on a "person-to-person basis." Computer letters were "confidential" and suggested unlimited possibilities for information delivery from seller to buyer. It made financial sense too, as "[y]ou talk only to those individuals most likely to take advantage of your offer, eliminating wasted advertising dollars." Computer letters could also take the place of the pitch of hurried and expensive door-to-door salesmen.

Automation did not have to mean cold and detached solicitations. Noted the company, "The appearance of the computer letter is similar to those typed by your secretary. The difference is indistinguishable to the untrained eye. Your letter can be tailored to fit your specific needs, and can be targeted to precisely the correct audience for your business. Your letter can be fully personalized because you may insert into the body of the letter any information contained in your name and address file. Your letter can be accurately dispatched to reach your audience on a predetermined time schedule. Personalized direct mail advertising is an ideal way to: announce a new product or service; produce qualified sales leads, maintain contact with your customer - a personal letter expressing appreciation for your customer's business will create good will for your company; secure new distributors or retail outlets for your product; solicit opinions and attitudes about your products and services."

The company backed up these promises with creative copy assistance, art and design help, a complete print shop, and its own mail room facilities. The first customer for these services was the American Bible Society.

The Company Goes Public

In 1979-80 the company began branching out into the credit card list processing business, picking up a major client in Citibank.

To keep up with the demand for list processing, technical support specialist David Moix engaged in a one-man arms race. He first installed two midrange IBM 4341 Processors compatible with System/370 (and with an instruction execution speed 3.2 times faster), two of IBM's fastest tape drives, and six Control Data Corporation disk drives in May 1980. By September 1980 he was installing an additional IBM 3370 DASD control unit with 571.3 megabytes of auxiliary storage and Control Data Dual Access Facility for disk drives. In October he purchased two megabytes of memory for one of the 4341s, and in November two IBM high speed printers. Moix also set up a new CCX Network Control Center for remote teleprocessing. Job control language (JCL) scripting and insertion of prewritten JCL procedures ("PROCS") was handled by Dale Gill, an operations analyst then working on his computer science undergraduate degree at the University of Central Arkansas.

To reflect the transformation of the company into a full-fledged information technology company (and to reduce confusion with Demographics Systems of New York), in 1980 two executives, Rodger Kline and James Womble, succeeded in their petition to change the company name to CCX [Conway Communications Exchange], Inc. Noted Client Services Department executive Jennifer Phillips in the pages of company newsletter The CCXchange, "We tripled our staff in List Development, doubled it in Production Control, and doubled it in Order Control and Shipping. These figures are even more significant when you realize our production levels increased over 100%!"

Employees began reporting information production performance in the company in terms of "cumulative names shipped." Research & development head George Balogh was running approximately 350 million name and address records every week through the LOFS system with his "Selector" program in 1980. Of course, not all of those names were selected in any given job and then "shipped" to the customer. In the single month of November 1982 the company actually shipped 79,479,812 cumulative names. One year later it was 90,149,263 names.

In 1983 CCX became a publicly traded company under the revised name CCX Network, Inc. It also collected its first major award from the Direct Marketing Association, the Gold Echo Award for innovative technology, and recognition as a DMA Echo Direct Marketing Leader.

Electronic Mail

Acxiom's directors spent about $1 million looking at electronic mail as a future marketing technology, but eventually wrote off the effort as a failure.

The Crunch of '87

In 1986 Phil Carter joined the company as president and chief operating officer. Carter and Morgan together began making a few aggressive acquisitions each year. CCX Network first acquired BSA Inc. of New Jersey, a maker of merchandise fulfillment software systems for the catalog industry. Morgan and Carter then began looking to Europe for opportunities, purchasing direct marketing computer service bureau Southwark Computer Services Ltd of the United Kingdom in December 1986 and turning it into Acxiom U.K., Ltd. In 1986 it also received licensure as a provider for the National Change of Address (NCOA) system. The next year it added computerized direct mail business Modern Mailers of Philadelphia, Pa., to the company portfolio. Modern Mailers, with its personalized printing and lettershop operations, became Acxiom Mailing Services (AMS).

Recalled Morgan, "Expansion doesn't look so daunting if you build this way - adding three companies this year, and four the next and before you know it you have a billion dollar company." Systems engineers and programmers in the Productions and Advanced Systems divisions of the company were not quite ready to agree. In 1987 CCX Network experienced a second bottleneck rivaling the 1975 perfect storm. Associates of the company even had a name for it: the "Crunch of '87." The Crunch was caused by newly inaugurated marketing services plans and a serious and growing backlog of data processing requests, and exacerbated by difficulties encountered in the installation of new hardware and software to alleviate the problem.

In 1987, in a joint venture with Young and Rubicam, Inc., the company began assembling a massive marketing database containing records on 200 million American consumers and 10 million businesses. Attached to individual's names were their age, income, whether they owned a home or not, automobiles in their possession, occupation, number of children, level of education, personal buying habits, types of credit cards used, and other personal measurements like height and weight. The information gave the company, noted corporate communications chier Peter Hoelscher, to identify "all of the left-handed, red-haired plumbers in Milwaukee that drive Chevrolets." Acxiom used InfoBase to verify records in client databases and also to help match new customers to its clients products and services. Acxiom maintained Infobase on IBM mainframes running the Multiple Virtual Storage (MVS) multiprocessing operating system.

At the same time David Moix, with the assistance of John Berry, Michael Linz, and many others, struggled to clear the clogged stream of bits in the company's list order fulfillment operation. In February 1988 a self-anointed "Cross Section Gang" began working on a solution to the problem of large and growing heaps of tapes haphazardly maintained in the tape library by creating an automatic tape scratching system. The others worked to bring on-line mass storage by December 1988, installing a StorageTek 4400 Automated Cartridge System with host software, a library management and control units, storage modules, and cartridge subsystems. The components provided for fully robotic mounting and dismounting of 6,000 individual cartridge tapes into a cartridge drive. Moix reported that "account service personnel will be able to increase the size of jobs running through ALDS [?] while reducing their turnaround time on these jobs. The ACS, together with ALDS, eliminates the need for work requests and operator intervention, allowing the operators to focus on those jobs that cannot be automated."

Remarked Charles Morgan in the aftermath, "During the recent production crunch we held meetings among all directors to allocate each day's use of overall resources. The experience reinforced the need for a greater subordination of processing services. If we have to negotiate for each resource in each step of the total process, nothing will get done. That is bureaucracy at its worst. The three operating divisions established at CCX Network is one step in meeting this challenge."

CCX Becomes Acxiom Corporation

On July 20, 1988, the CCX Network became the Acxiom Corporation, a name combining the Greek word "axiom" (axioma [ἀξίωμα], a proposition widely accepted on its own merits) with an homage to the unusual consonant combination in the former name. The client base of Arkansas companies receiving services dwindled rapidly to zero, replaced by national companies like [?]. "We knew if we were going to be a serious business, we had [to] break out of the regional status," recalled Morgan. "Otherwise, we were going to struggle." Acxiom proffered a wide spectrum of services for its list industry clients (catalog mailers, direct marketers), including address hygiene, list rental fulfillment, merge purge, postal presort, public database creation, and segmentation.

The most common service requested from the List Industry Services Division on the second floor of the Account Services Building on the new Conway company campus was list rental fulfillment, assisting clients wanting to rent their own databases and optionally "enhance" them with data pulled from Acxiom's marketing database. Major competitors in the late 1980s included IBM and General Motor's Electronic Data Systems division. Other list processing services involved gathering names, printing and mailing solicitations, weeding out potentially undeliverable mail, processing address lists through the National Change of Address registry, correcting address lists, and removing duplicate records. Segmentation services split customer lists into smaller groups based on lifestyle characteristics, buying behavior, income and wealth, and other attributes. Shipping of lists to customers was still accomplished from the loading dock, conveyed by air freight, or delivered by U.S. Mail express service.

In 1988 Marketlead Services Ltd, a promotional materials handling and merchandise fulfillment operation in Sunderland, England, joined the ranks of Acxiom subsidiaries.

In 1989 it shut down BSA and AMS picked up Guideposts Associates Inc., a New York State publisher of the religious periodical Guideposts, seeking information management expertise related to its list of 20 million names. Guideposts had its own database, called GS/2000, but found itself needing a more robust subscription fulfillment system that integrated its products and customer service functions in one silo, and to verify its records against InfoBase to better target its solicitations for books and magazines. One year later Acxiom began processing and sending out 200 million pieces of mail annually in a contract with Rodale Press, publisher of Organic Gardening, Bicycling, Runner's World, American Woodworker, and Backpacker Magazine. Spencer's Gifts also reached out to Acxiom for similar catalog services.

In 1991 the company suffered a brief dip in profitability, caused in part by steep postal cost increases and a recession. The company announced layoffs totaling four hundred employees in the first contraction for the company since 1975. Contracts with Allstate Insurance and Trans Union benefited the company enormously in the early 1990s, and revenue grew from $89.7 million in 1989-1990 to $964.5 million in 1999-2000. Acxiom began managing the Trans Union data center in Chicago and Allstate's databanks in 1992.

In 1995 it forged a strategic alliance with The Polk Company of Detroit, managing the company's data processing center in Taylor, Michigan, in return for access to Polk's databanks of automobile vehicle registrations for use by its insurance industry clients. In July 1995 it acquired all issued and outstanding shares of Generator Datamarketing Ltd of the U.K., paying $6.46 million. One month later it purchased DataQuick Information Systems and DQ Investment Corporation of La Jolla, Calif., a provider of information about real estate holdings and purchases, in a $24 million stock swap.

In 1996 it engaged in a strategic partnership with Oracle, sharing its own data warehousing technology and decision-support systems in exchange for Oracle database support and online analytical processing (OLAP). By that year the company had expanded its information infrastructure to six linked and robot-assisted data silos that matched information stored on tapes at a speed of sixty miles per hour. Twenty mainframes processed data at 1.3 billion bytes per second.

When David Florence moved to sell his stake in Direct Media in 1996, Morgan stepped in to acquire the company for $25 million.

Also in 1996 the company made major purchases of capital stock in ProCD, Inc., a maker of white pages reference data CD-ROMS, eventually acquiring the company outright. ProCD technology allowed Acxiom to move into smaller market niches, like list management for small businesses, and Internet provision of services. It sold the retail part of ProCD to American Business Information in exchange for more proprietary technology.

Around 1997 Acxiom acquired healthcare direct marketers Buckley Dement, KM Lists, Normadress of Paris, National List Protection, and MultiNational Concepts. The Buckley Dement acquisition was especially historic. Homer Buckley of Skokie, Illinois' Buckley Dement had coined the term "direct mail" in 1900, co-founded the Direct Mail Advertising Association in 1917, and published the classic text on the subject in 1924. Along with Buckley Dement the company acquired its affiliate KM Lists, Inc.

The aim of the Acxiom Data Network, launched in 1997, was to help clients "fine-tune" their databases over a secure Internet connection. Smaller companies no longer had to ship their files to the company to take advantage of Acxiom's InfoBase services, but could access them right from the desktop. Morgan called it "a defining moment" for the company. In 1997 Acxiom's chief competitors, data brokers ChoicePoint and LexisNexis, were also voraciously swallowing smaller fish in the industry with access to motor vehicle and police records, real estate property filings, consumer surveys, birth and death certificates, fishing licenses, marriage and divorce decrees, and criminal and civil court dossiers.

In 1998 Acxiom acquired Downers Grove, Ill.-based direct marketing and information management outsourcing firm May & Speh, Inc., a leading competitor, in a $625 million stock swap. May & Speh's largest client was Sears, Roebuck & Co., for which it conducted demographic analyses on a Univac File Computer beginning in the mid-1950s. The two companies had studied the proposed merger for four years. The acquisition made Acxiom the largest database marketer in the world. The combination of technology forged from the merger of these companies - joining the May & Speh Quiddity system and the Acxiom Data Network - resulted in a system that allowed customers to use and manipulate company data online over the Internet in realtime. Database queries on 350 trillion characters of stored consumer data that only four years before took six minutes to return results now averaged only nineteen seconds.

At the turn of the millennium the company continued to make strategic acquisitions, including Phoenix-based Computer Graphics, Inc., Horizon Systems Inc., and Marketing Technology, S.A. of Spain in 1999. The company also acquired customer database integration technology from AbiliTec and the real-time Solvitur enterprise codebase from Active Software in 1999(?). In 2002 it acquired lifestyle data provider and market segmentation firm Claritas Europe.

It formed an alliance with Dun & Bradstreet, sharing its InfoBase in return for business-to-business marketing data in 1999. Similar alliances were struck with Broomfield, Colorado's Abacus Direct Corporation and Palo Alto, California's E.piphany.

In 2004 Acxiom added AddressAbility to its product lineup for customer address list cleaning. The product fixed inaccurate zip codes and added codes to records missing them, and added Carrier Route Coding information to secure post office presort discounts. The product received Coding Accuracy Support System (CASS) certification scores above 98 percent. That same year Acxiom acquired consumer lifestyle and behavior tracker Consodata of Britain, France, Germany, and Spain.

In 2005 Acxiom purchased internet database management software maker Digital Impact for $140 million.

In 2007 the company acquired consulting and data analysis firm Equitec, and behavioral-targeting firm EchoTarget Inc. The company can help marketers custom-tailor internet ads to online browsers with tracking cookies and a product called Relevance-X.

The company's demographic and consumer marketing segmentation product is called Personicx. Personicx uses a thirteen-digit code to place every household into a particular "lifestyle cluster." Acxiom customers use Personicx to locate the "best customers and prospects," scattered across seventy discrete household clusters. These clusters are given names like "Married Sophisticates," "Penny Pinchers", "Skyboxes and Suburbans," "Summit Estates," "Rolling Stones," "Single City Struggles," "Aging Upscale," and "Timeless Elders." Depending on particular circumstances or "lifestyle trigger events" - like graduation, the birth of a child, marriage, or retirement - about a third of the households are reassigned to a new demographic cluster each year.

Other company brands, trademarks, or operating units are Opticx, Acxiom Information Security Services, and Postal Optimization Products and Services. Many of these acquisitions, noted company lawyer Tim Spainhour in a 2003 U.S. House briefing, allows Acxiom to provide "prescreened lists for credit and insurance solicitations" and "recognize and engage customers who have the highest need for their product or service." They also sped up "postal certification" and enhanced "consumer choice."

Company Organization and Unconventional Culture

Acxiom shed its local customer base early in its history but it remained a celebrated institution in a state better known for its forest products, rice production, and blue-collar specialty-industrial workforce. Its unconventional early political connections also made it especially noteworthy and powerful. Only a handful of information technology firms emerged within the borders of the state in the last decades of the twentieth century, most notably banking software developer Systematics, ATM network specialist Arksys, and wireless telecommunications provider Alltel. "We've always been enigmatic. People really do not know what we do, because for years, we had no customers in Arkansas," noted Jerry Adams.

Instead the companies extended its tendrils to the left and right coasts of the country, into Canada, and overseas to the United Kingdom and continental Europe. Overcoming the "Arkansas stereotype" was not always easy. The state regularly falls near the bottom in state rankings of economic and social development. Indeed Arkansans themselves regularly "Thank God for Mississippi."

Morgan encouraged potential clients to visit Conway anyway. The strategy of playing off of lowered expectations worked. "When people from New York, or Northeast visit, they're usually astounded by our facility," said Morgan. "But on the other hand if we were located in Silicon Valley, it would probably be just what they had expected." The company also spoiled prospects with Southern hospitality. "It is rare if visitors are here more than a day and don't say, 'I was really surprised by your nice facility, but as I spent time in the building what impressed me most were your friendly people, especially their enthusiasm and energy," said Morgan. "Our people exemplify a small town 'customer service' philosophy. They provide the same type of 'personalized' service you would expect to find at the corner store where the owner knows your name." As big-time corporate players like J.B. Hunt, Tyson Foods, and Wal-Mart gained national notoriety, and as the state established a reputation as a haven for rust belt industries looking for lower wages scales and nonunion employees, concerns about working with an Arkansas-bred company melted away.

Despite this, Acxiom was initially developed somewhat insular groups according to services provided. In the 1980s Direct Marketing Services under Hank Ponder Jr. handled new business such as catalogers, insurance companies, nonprofit fundraisers, club and membership organizations, horticulture companies, subscription agencies as well as retailers who wish to utilize direct marketing programs to stimulate store traffic. List Industry Services under Jim T. Womble and Jerry Adams provided customers who are list owners, list managers, and list brokers, with a "marketing edge, either through expense control or through the timely delivery of ... service." National Marketing Services under Don W. Barrett Jr. provided direct marketing information services to publishers, financial institution and Fortune 500 companies. Advanced Systems under Alex Dietz developed and managed key applications systems like LOFS, Quick Systems, Convert Systems, Demodup Systems, and ALDS. Business Development, run by Jennifer T. Barrett, developed prospects, customers, and our own employees on a corporatewide basis. Corporate Staff under R.P. Carter handled interdivisional revenue opportunities. The Financial Services Division housed the accounting staff and corporate accounting and the integrity of all financial information. General Services Division housed facilities management, purchasing, construction, etc. The Information Services Division handled data processing, and superintended over the PC Development Group, Software Support Group, Hardware Support Group, and Management Information Systems Group.

In 1990 the company realigned its divisions by specific industry categories: Business Services, Consumer/Financial, Media/Services, and Retail/Catalog. Said COO Phil Carter at the time, "Aligning by industries, rather than services provided will enable Acxiom's customers to get all their marketing services from one group and one customer service team. This will allow customers to do business with one set of people – people who are specialists in their industry and who understand their particular objectives." Said Phil Bartos, group executive for Retail/Catalog Services, at the time, "We want to marry our customers not just date them." The company retained its older International Services Group to control its growing overseas business.

Acxiom then began building up new collaborative team-oriented management and work structures, leading to its being named Best Place to Work five times by Fortune magazine. "This ... fundamentally changed how we think and operate," Morgan said, calling it a major turning point in company history. "I can't even imagine what this place would be like if we hadn't done what we did." Acxiom adopted Japanese management techniques that enlist employees in solving job-related problems. In 1988 a Quality Circle Program called CCXCEL was initiated at the Conway headquarters. Two years later the company launch a total quality management program called "Race for Excellence."

Company employees also lost their formal titles. "Unlike other companies built on a pile of staff titles and multiple management levels, at Acxiom, associates don't have titles," announced the company in later marketing materials. "The company did away with them ... to create an environment without boundaries, where all associates are empowered to make decisions to facilitate their specific client's business goals. Acxiom's flat team-based management structure results in an energized staff that is more empowered, more engaged in the business and always coming up with new ideas for retail customers. Teams often become an extension of their client's business, participating in strategic-business planning sessions or even going as far as strolling stores and talking with shoppers."

In April 1993 the company inaugurated telecommuting for many of its employees. The first participant in the At-Home Worker Project was Tina Bailey. "They have a flexible work environment," explained Peter Hoelscher, "For example, they can leave at 2 o'clock to go to a United Way committee meeting or a parent-teacher conference. It's very family-friendly." The company added on-site recreational/wellness and childcare facilities for employees. Childcare was especially welcome as more than half of all Acxiom employees by the late 1990s were women.

In 1997 Charles Morgan attempted to break down the corporate hierarchy by adopting the title "Company Leader." To reduce the chasm between the front line "associates" and the administrative groups he gave all executives the same size office that he enjoyed, one measuring ten feet by ten feet. He inaugurated regular "Morgan's Minutes" messages to associates and read emails generated by the Minutes carefully.

By the first decade of the twenty-first century work at the company was organized into four fairly independent "silos." Three of these silos were managed from Arkansas: Data Products, Services, and Financial Services. The fourth division, Outsourcing, was managed from Downers Grove, Illinois. The company had main overseas operations headquartered in London, Paris, Phoenix, Sunderland, and Sydney.

The company also completed a 2002 transition away from the old headquarters in Conway into the $25 million twelve-story Acxiom River Market Tower in downtown Little Rock. "We wanted to separate our headquarters from our operations," Morgan noted. "There was a certain stigma for some people when they discovered that our operations and headquarters were in the same building." Some of the down-home charm was retained: During the Clinton Library dedication in November 2004 Acxiom employees were warned to refrain from bringing deer hunting rifles to work with them because the Acxiom River Market Tower overlooked the presidential library site. November is prime deer hunting season in Arkansas.

Privacy and Security Concerns

In 1980 security problems amounted to petty theft. As announced in the CCXchange: "We are currently experiencing some difficulties with unauthorized use of our back door (near the shipping department) after normal working hours. The recent theft of the microwave and our coffee supplies only serves to remind all of us of the importance of keeping our building locked when most of us are not here."

The increasing complexity of federal statutes and its own privacy policies led to many changes. In the 1990s credit reports were strictly protected, as were video rental records and federal agency records, but medical records, bank records, credit card reports, and other database company records were not.

As part of the culture change at the company initiated in 1990 Acxiom employees adopted a vocabulary of data privacy predicated on a matrix known as the "hierarchy of data protection. The hierarchy divided the company's raw material into data that was privately owned, restricted-use, household specific, predictive in nature, and information that was basic. Privately owned data was for the use of company management only, and was never to be put directly into the hands of another company. Restricted-use and household data was to be shared carefully and controlled only by marketing personnel abiding by strict contractual agreements. Predictive data, used in making segmentation decisions, was to be shared with clients only in the form of final computed "scores or codes." Basic information could be used in preparing reference materials and in targeted campaigns.

Acxiom established a Corporate Privacy Council in 1991 to guide the company it its attempts to assure compliance with state and national data privacy rules and regulations. According to testimony before the Federal Trade Commission, the company established the council to "protect the information it processes on consumers and to promote policies within the industry to protect individual privacy." The establishment of a privacy council opened a window to begin engaging in consumer privacy consulting. The company has increasingly turned its attention to providing services related to customer loyalty, brand protection, and what it calls "consumer advocacy."

Also in 1991 the company created a new position of "chief privacy officer," a first for the industry. The position was given to Jennifer Barrett, hired by Morgan in 1974 straight out of the math and computer science program at the University of Texas at Austin. By the late 1980s Barrett had risen in the company to the position of Business Development Division Leader, charged with identifying prospective clients and developing the skill base of its own employees. Barrett has encouraged her company and other companies that manage personal data to take care when when turning that information into behavioral targeting campaigns. She encourages companies to take stock of how "shocked the average consumer would be to learn what information is being collected about his/her behavior and how you plan to use it in a campaign," especially sensitive medical data or information about children. She also suggests that companies to avoid making direct references to information gleaned from individual buyer decisions the "leave him with the feeling he is being watched."

Acxiom led on privacy even when other players in direct marketing failed to follow. "The first time I brought up privacy policy at the DMA [Direct Marketing Association] was 1992, when I joined the board," Morgan has stated. "Everyone looked at me like I was an idiot. It wasn't on the agenda." Despite this, a consumer and citizen privacy backlash has in some ways defined the operations of the company and the industry sector as a whole since the mid-1990s. Acxiom suffered from some public and legislative fallout over its for-profit data aggregation services in these years. To counteract this impression Acxiom entered into agreements with the Direct Marketing Association to develop "opt out" methods for customers who did not want their information entered into Acxiom's burgeoning databases.

Since 2000 a series of major security breaches and privacy gaffs attracted national attention to the company. The first two breaches resulted in what has since been called "the biggest data heist ever." In August 2003 Daniel Baas, a twenty-four year old systems administrator for a Cincinnati, Ohio, data marketing company was caught a with a stack of compact disks containing records on millions of Americans. The records found in his home had come from Acxiom. Baas had been trolling through one of the company's unencrypted ftp servers, using a legitimate vendor password, for two years. Baas had apparently not released the data (10 percent of the company's total stockpile) at least not publically, but had contacted others for help in creating his own data silo in exchange for access to the stolen records. Baas pled guilty to federal cybercrime charges and was sentenced in December 2003. Said federal prosecutor Robert Behlen, "Had the defendant chosen to post the stolen information on the Internet or used it to open credit card accounts, the amount of damage would have been significantly higher."

As Baas was being investigated, the Secret Service and Federal Bureau of Investigation uncovered a whole den of hackers in Boca Raton, Florida, with unauthorized password access to the same Acxiom server. One of the files found by the Florida hackers included a list of encrypted passwords used by about three hundred legitimate Acxiom clients, including Citigroup and J.P. Morgan Chase & Co. About forty percent of those passwords were hacked, leading to more server intrusions. Here again the data, 1.6 billion names, addresses, phone numbers, had not been used for nefarious purposes. In that case federal prosecutors lodged a 139-count indictment against forty-five year old executive Scott Levine of Snipermail.com, a bulk email marketer. He was found guilty on one hundred and twenty counts. Said Morgan at the time, "We dodged a howitzer with that one. It was a whole company-a bunch of crooks. If it had been the Russian mafia, we would have been in a hell of a mess." The company reacted by upgrading security procedures, going to extraordinary lengths to restore confidence in the company by conducting eighty-two security audits in a single year following the breaches.

• on Acxiom data breaches see: http://pseudo-flaw.net/content/acxiom/

Only days after the government issued an arrest warrant for Baas another, equally damaging, data breach in potential violation of the Privacy Act of 1974, placing commercially available data into the hands of a federal government agency without informing the public, came to light. In September 2003 the Electronic Privacy Information Center (EPIC) "submitted a complaint against JetBlue Airways and Acxiom with the Federal Trade Commission, citing the unauthorized release of passenger information to the U.S. Department of Transportation in early subcontracting work preceding the post-9/11 computer assisted passenger prescreening program known as CAPPS II." In the harrowing days after 9/11 Acxiom and the federal government had initiated an ongoing and extensive data sharing partnership. Acxiom director Mack McLarty, chief of staff in the Clinton administration, realized almost immediately that information housed in the company's data warehouses would be of value to federal investigators.

Washington certainly needed the help. Reflecting on the federal response to the terrorist attacks Morgan complained, "Homeland Security has done a poor job of doing just about anything." After sharing data on eleven of the attackers as a patriotic duty Morgan recalled how the FBI came calling with obsolete Intel 286 laptops. Said Morgan, "Their technology was unbelievably bad, and the international terror experts were computer illiterate." The FBI spent months at Acxiom, using the company's storehouse of data under subpoena to track associates of the terrorists and compile a case for the deportation of two Muslim men who boarded planes on 9/11 with box cutters on credit card scam charges. Remembered Morgan, "We were always paranoid about people looking at the data in that way - as an investigative tool. It was a slow-going, laborious discovery process, with some amazing moments." Acxiom also began making presentations in other parts of the federal government. It showed the Department of Health and Human Services, for instance, how it could track down one hundred individuals all using the same Social Security number. It also showed the U.S. Department of Justice how it could use "marker words and phrases" to conduct web surveillance for sensitive material on "abortion, racial superiority, politics, religion, immigration, and foreign affairs."

Clinton himself had visited Acxiom headquarters on October 5, 2001, and recommended the company be considered as a first line of defense against terrorists boarding airplanes. Retired General Wesley Clark, an Arkansan, seconded the recommendation with his own positive assessment and later helped the company open doors as a consultant. Acxiom's help, however, precipitated a crisis pitting national security interests against the personal privacy of citizens. "A lot of the headway we have made lies in the access that General Clark has provided," said Morgan in a 2002 memo, "Here's the approach he takes to helping position Acxiom: 'IT has a role to play because we'll never be safe enough if we try to build walls and conduct searches and screenings. We have to really know who our neighbors are and what their interests are.'" In February 2003 Acxiom became a passenger prescreening subcontractor.

The perils of such an data sharing alliance became clear after JetBlue released five million passenger records to Pentagon subcontractor Torch Concepts to determine whether patterns in passenger travel datasets could reveal potential terrorists who might use planes to attack military bases. Torch matched some of the JetBlue records to Social Security numbers, wealth status, occupation, and other data it received from Acxiom. For the tests Torch used what it called a legitimate intermediary, the Transportation Security Administration (TSA), now part of the U.S. Department of Homeland Security. The way the data was passed along not only failed to meet federal compliance standards but, EPIC alleged, violated Acxiom's own privacy policies and represented deceptive trade practices. The breach was discovered when Torch included private information on a JetBlue customer on a slide in a Homeland Security symposium presentation entitled, "Homeland Security: Airline Passenger Risk Assessment."

Caught up in the JetBlue scandal was General Clark himself, who had just declared as a candidate in the upcoming 2004 presidential race. Clark had no knowledge of Torch passenger profiling, but suffered under the intense media glare surrounding the incident as it became clear that he had helped Acxiom win government contracts for CAPPS II. Acxiom general counsel Jerry Jones defended the actions of the company. "We reached out to [Clark] as someone who might get the attention in Washington of our capabilities," noted Jones. "He was looking for ways to help make the country safer and more secure." CAPPS was canceled in 2004 and later replaced by the TSA's Secure Flight program. Also ensnared in the tug-of-war between personal privacy and national security was retired Admiral John Poindexter, who saw his federal Terrorism Information Awareness (TIA) program, and a proposed terrorism futures exchange, canceled by Congress. Acxiom had also reportedly been interested in subcontracting work on Poindexter's exchange and other TIA projects.

The company currently houses in its five acre "shark tank" in Conway, Arkansas, and more than 850 terabytes of data and twenty billion customer records scattered across multiple databases with real-time support applications in multiple locations worldwide. The company maintains its operations more and more on a stable and inexpensive network of personal computers instead of high-end servers as part of its grid computing initiatives.

In 1999 marketing executive Jerry Adams noted that "one of the areas that is very important to Acxiom is consumer privacy. We recognize the importance of privacy, and we also recognize the need for helping major companies be efficient with their information-management decisions."

End of the Morgan Era

In July 2005 Acxiom's largest shareholder, the hedge fund ValueAct Capital Partners, launched a hostile corporate takeover of the company. ValueAct offered to buy outstanding shares of the company for $23 and then $25 dollars per share. Jeffrey Ubben of ValueAct complained that Morgan's personal lifestyle, which included racing in NASCAR events and developing the private La Querencia golf community in Cabo San Lucas, Mexico, had led to an inexorable drift in his attention away from the profitability of the company. "Every once in awhile, when the train goes off the track, we are activists," said Ubben.

The company board of directors (Thomas F. McLarty III, William T. Dillard II, Mary L. Good, Ann Die Hasselmo, Stephen M. Patterson, and Morgan) rebuffed the offer. In May 2007 Charles Morgan announced a $3 billion plan to take the company private. When this bid failed, Morgan retired from the business and the company agreed to acquisition by ValueAct and Silver Lake Partners in a $2.25 billion deal. In October 2007 the private equity firms walked away from the deal when the business environment for such deals crumbled, paying a $65 million penalty. The company remains publicly traded.

In February 2008 John Meyer became the chief executive officer of Acxiom. Meyer reorganized what he called the "nebulous" organizational structure of the company, dividing it into "business lines" (Customer Data Integration & Marketing Services, Information Products, Digital Marketing Services, Consulting Services, IT Services, and Background Screening Products) and "markets" for those lines (Financial Services & Brokerage, Retail & Consumer Packaged Goods, Travel & Entertainment Media Telecom, Insurance Health Technology, Manufacturing & Distribution Auto, Europe, and APAC). This organization assured that in each transaction at least two separate people would be engaged in making sure that technology services were provided and relationship nurtured.

Meyer also repositioned Acxiom as a "global interactive marketing services company." The company competes in the marketplace with Experian Information Solutions, Dunn & Bradstreet, and Harte-Hanks. The company had sales of $1.3 billion in 2007-2008. Acxiom employs about 6,600 people across the United States and in eleven foreign countries.

Clients

Acxiom helps twenty-four of the top twenty-five credit card issuers identify appropriate customers for its products.

Current clients include Advance Publications, Allstate Insurance, AT & T, Bank of America, Citibank, Conseco, Federated Department Stores, First USA Bank, General Electric Capital Corporation, IBM, The Polk Company, Proctor & Gamble, Sears, Trans Union, and Wal-Mart. Many of these clients are contractually obligated in long-term commitments.

Odds and Ends

• title: some riff on Acxiom, algorithms, applied research, and Arkansas
• idea: "unlikely" (City of Colleges) emergence deep inside Arkansas, at midpoint between Pickles Gap and Toad Suck.
• question: benefits from Arksys, Systematics, Alltel? employees "poached" from there? Where do employees come from? Hendrix? UCA? U of A? UALR? Where?
• How to keep data fresh and accurate?
• IBM 370 assembler important skill
• interviewing Jennifer Barrett, Jim Cloninger, Jim Briggler, Peter Hoelscher, Susan Kennedy, Sherry Collier, Robert Burks, George Balogh, Linda Kirtley, Mark Bausom
• ask for questions from Phil Bartos, Michael Herring, Philip Philpott, Holly Easley
• watch The Persuaders on Frontline
• look through security and privacy bibliography for potential questions
• how was quality control managed?
• http://www.acxiom.com/about_us/overview/milestones/Pages/2008.aspx
• http://www.accessmylibrary.com/

Acxiom Employee Growth

• all figures are approximate

• 1972 - 25 "associates"
• 1974 - 35
• 1975 - 25
• 1990 - 1,600
• 1991 - 1,585
• 1994 -
• 1995 - 1,850
• 1996 - 2,500
• 1997 - 3,300
• 1998 - 3,600
• 1999 - 5,000
• 2000 - 4,750
• 2001 - 5,885
• 2002 - 5,400
• 2003 - 5,020
• 2004 - 5,500
• 2005 - 6,000
• 2006 - 6,765
• 2007 - 7,100
• 2008 - 6,610
• 2009 - 6,400

References

• Ian Ayres, Super Crunchers: Why Thinking-By-Numbers is the New Way to Be Smart (New York: Bantam Books, 2007), 134-135.
• Barry Beck, "Ward Industries, Inc.: A Historical Study," Faulkner Facts and Fiddlings 16.4 (Winter 1974): 67-83.
• James Gordon, "Acxiom Transforms, Performs," Arkansas Business, December 25, 2006.
• John Hama, "Acxiom to Pay $625 Million for Chief Rival," Arkansas Business, June 1, 1998.
• Harold B. Johnson, "A History of Dave Ward and His Company," M.S.E. thesis, Arkansas State Teachers College, 1960.
• Toby Manthey, "Maker of School Buses Lays Off 170 in Conway," Arkansas Democrat-Gazette, March 27, 2009.
• Janet Novack, "The Data Miners," Forbes (February 12, 1996): 96.
• Sara Olberding, "What Makes Acxiom Corporation Such a Success," Journal for Quality and Participation (November-December 1997): 46.
• Jon Parham, "Did Short Sellers Help Push Down Acxiom Stock?" Arkansas Business, September 6, 1999.
• Jon Parham, "Record Revenues Fail to Deter Acxiom Suits," Arkansas Business, January 31, 2000.
• Jack W. Plunkett, Almanac of American Employers (Plunkett Research, Ltd., 2007), n.p.
• "Pro CD, Inc. Acquired by the Acxiom Corporation," Information Today, (May 1996): 39.
• Catherine Reagor, "Arkansas-Based Acxiom Corp. Acquires Phoenix-Based Computer Graphics Inc.," Knight-Ridder/Tribune Business News, June 18, 1999.
• George Waldon, "Acxiom's Turnaround: Will It Continue?" Arkansas Business, November 16, 1992.
• Jamie Walden, "New Acxiom CEO Seeks To Bring Focus to Firm," Arkansas Business, July 21, 2008.
• Wythe Walker Jr. "Acxiom's Growing Pains," Arkansas Business, February 4, 1991.

External links

• Acxiom homepage
• MSNBC - Office memo: Don't bring guns to work