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. It collects information on more than ninety million households. 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. The chief executive officer at Acxiom is John Meyer. The company is organized into four main divisions. Three of the divisions are managed from Arkansas: Data Products, Services, and Financial Services. The fourth division, Outsourcing, is managed from Downers Grove, Illinois. The company has offices in London, Paris, Phoenix (Arizona), Sunderland (England), and Sydney.

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 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 to found Demographics Inc. with his brother Stephen Ward in 1969. The immediate objective of the company was to meet the urgent direct 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 millionaire Arkansas transplant Winthrop Rockefeller, who rejuvenated the struggling state Republican Party with new data processing machinery for maintaining its member lists.

The company also secured a contract with local utility Conway Corp in 1969 to process customer billing statements. Another early client was Nabholz Construction.

At this point it was largely a printing business, as the company occupied a 6,000 square-foot building housing an IBM 370/167 mainframe computer and press (near the present Smitty's Bar-B-Que on Harkrider Avenue. One client was the bus company itself. The company soon expanded to cover other data processing needs.

In 1970 the system was used in the successful gubernatorial election campaign of Dale Bumpers. Ward's leadership as Arkansas' Democratic National Committeeman, also helped in the failed draft movement to elect Wilbur D. Mills to the Presidency of the United States in 1972.

Demographics, which relied on an IBM 370/135 computer, soon expanded to cover other data processing needs. More than fifty businesses contracted services by 1974. One client was the bus company itself. The company originally occupied a 6,000 square foot building housing a computer and press.

Revenue by the middle of the 1970s had increased to $1.2 million. The company had over thirty-five full time employees, some still card-carrying UAW members. The board of directors for the company matched the names of board members for the umbrella corporation Ward Industries.

Entry into Direct Mail Business

In 1975 the company began using its lists in direct mail operations. Its most reliable customer at the time was the Hot Springs, Arkansas, developer Diamondhead.

Charles Morgan and the List Order Fulfillment System

Ward divested himself of Demographics in 1975 in the midst of personal financial hardship. Ward opened a second plant opened in Beaver Falls, Pennsylvania, which failed in 1975. The company, then known as Ward School Bus Manufacturing, went into Chapter 11 bankruptcy in 1979. The plant in Conway is now owned by the IC Corporation.

Ward divested himself of Demographics in 1975 in the midst of these difficult economic times for the company. Charles D. Morgan, a company manager since 1972, became the new president and CEO.

Charles D. Morgan, an IBM-trained manager of the company since 1972, became the new president and CEO. Revenue by the middle of the 1970s had increased to $1.2 million. Diamondhead went out of business and election law changes conspired to cause the company to reevaluate its business plan. Morgan traveled to Yellow Pages directories maker Direct Media Inc. in Greenwich, Connecticut. Morgan observed company employees trying to manually compile individual yellow pages from a single list. "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 met with Direct Media CEO David Florence to discuss ways of automating the direct mail business. "I said, here is an opportunity," he recalled. "Computers could do this a lot better." Morgan returned with the kernel of an idea for what became the List Order Fulfillment System (LOFS), with Direct Media as the sole customer. Within two weeks the company had sketched out a solution. The entire programming job took nine months to accomplish. LOFS has since been described as the nation's "first fully-automated, on-line system used to generate mailing lists."

The company turned its experience with Direct Media into a general-purpose software package first used by the American Management Association, an organization providing business executive training. In that year, 1978, the company began advertising the LOFS package as the first comprehensive "marketing database" in the United States.

The Company Goes Public

The company changed its name to CCX Network [Conway Communications Exchange], Inc. in 1980, became a publicly traded company in 1983, and acquired its current name Acxiom Corporation in 1988.

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.

Infobase

In the mid-1980s the company began assembling Infobase, a marketing database containing records on 200 million American consumers and 10 million businesses. Attached to individual's names were their "age, estimated income, home ownership, cars owned, occupation, children, education, buying habits, types of credit cards used, height, and weight." 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.

Acquisitions and Brands

In 1986 Phil Carter joined the company as president. Carter and Morgan began making aggressive acquisitions together. That same year the company acquired Southwark Computer Services of the United Kingdom. In 1988 it became the Acxiom Corporation. In 1989 it closed down the operations of one of its acquired companies, the catalog-maker BSA Inc. and picked up Guideposts, a New York State magazine publisher seeking information management expertise related to its subscriber database of 20 million individuals. Competitors in the late 1980s included IBM and GM's Electronic Data Systems.

In 1991 the company endured a real low point, caused in part by steep postal cost increases and a recession. In 1995 it forged a strategic alliance with The Polk Company. That same year it purchased DataQuick Information Systems 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 suppot and online analytical processing (OLAP).

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

Around 1997 Acxiom acquired healthcare direct marketer Buckey Dement, KM Lists, Normadress, National List Protection, and MultiNational Concepts.

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. One of May & Speh's largest clients was Sears, Roebuck & Co., for which it conducted demographic analyses. The two companies had studied the proposed merger for four years. The acquisition made Acxiom the largest database marketer in the world.

Around 2000 Acxiom made major purchases of capital stock in Pro CD, a maker of reference data CD-ROMS. Pro CD 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 Pro CD to American Business Information in exchange for more proprietary technology.

Contracts with Allstate Insurance and Trans Union benefited the company enormously at the end of the 1990s, and revenue grew from $89.7 million in 1989-1990 to $964.5 million in 1999-2000. In 1998 the company acquired its primary competition in Illinois-based May & Speh Inc. for $625 million in stock. The company benefited from the client base of May & Speh and also its corporate headquarters operation in Downer's Grove, a Chicago suburb. One combination of technology from these two companies - the May & Speh Quiddity system and the Acxiom Data Network - allowed customers to use and manipulate company data online over the Internet in realtime.

In the early 2000s the company continued to make strategic acquisitions, including Phoenix-based Computer Graphics, Inc., Horizon Systems Inc., and Marketing Technology, S.A. of Spain.

It formed an alliance with Dun & Bradstreet, sharing its InfoBase in return for business marketing data. Similar alliances were struck with Broomfield, Colorado's Abacus Direct Corporation and Palo Alto, California's E.piphany. The company also acquired customer database integration technology from AbiliTec and the real-time Solvitur enterprise codebase from Active Software.

In 2007 the company acquired consulting and data analysis firm Equitec.

The company's demographic marketing product is called Personicx. Other company brands, trademarks, or operating units are Opticx, Acxiom Information Security Services, and Postal Optimization Products and Services.

Over the past two decades Acxiom also became well-known for its collaborative team-oriented management and work structure, leading to its being named a Best Place to Work several times by Fortune magazine. By the first decade of the twenty-first century work at the company was organized into three fairly independent "silos" for technology and outsourcing, marketing, and data products.

Privacy and Security Concerns

A consumer privacy backlash has in some ways defined the operations of the company 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 two major security breaches attracted national attention. One of these computer break-ins resulted in what has been called "the biggest data heist ever."

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."

The company currently houses more than 850 terabytes of data and twenty billion customer records.

Acxiom Headquarters

Acxiom's $25 million twelve-story headquarters, the Acxiom River Market Tower, at 1 Information Way in downtown Little Rock is only three blocks from President Clinton Avenue. The new headquarters, completed in 2002, meant a shift in administration away from the old headquarters in Conway. 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.

John Meyer Takes Over as "Company Leader"

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, but the company board of directors 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 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 divisions focused on Customer Data Integration & Marketing Services, Information Products, Digital Marketing Services, Consulting Services, IT Services, and Background Screening Products

Meyer also repositioned Acxiom as a "global interactive marketing services company."

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.

Acxiom Company Employee Growth

• 1998 - 3,300

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