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, Sunderland (England), and Sydney.

Company Origins

• idea: unlikely start deep inside Arkansas, at midpoint between Pickles Gap and Toad Suck.

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. He also provided technical assistance in the failed draft movement of U.S. Representative Wilbur D. Mills as a potential candidate in the 1972 Presidential campaign against Richard Nixon. Demographics supported Democratic candidates in other races, including the 1975 Presidential campaign of Lloyd Bentsen.

The company began diversifying its client base immediately after incorporation. One of the earliest customers was the bus company itself. 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 Arkansas retailer of building supplies and a motel owner. "My family had a small motel and a building supply business in Arkansas. We worried about things like sales, profits and borrowings, and it helped a lot that I grew up in that environment."

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 traveled 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.

• description of LOFS

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. Three years later the company began building its first comprehensive "marketing database" atop LOFS 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.

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 together began making a few aggressive acquisitions each year. 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." CCX Network first looked to Europe for opportunities, purchasing Southwark Computer Services of the United Kingdom in December 1986. In 1988 it became the Acxiom Corporation, a name combining the word "axiom" with an homage to the CCX name. 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 marketers Buckley Dement, KM Lists, Normadress, National List Protection, and MultiNational Concepts. The Buckley Dement acquisition was especially historic. Homer Buckley of Chicago's 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.

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. One combination of technology forged from the merger of these companies - 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.

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 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.

"With Consodata, for instance, we were acquiring a company that was in direct competition with a company we'd already acquired - Claritas - and so we weren't allowed to do as much due diligence before the announcement as I'd normally expect," recounts Morgan. (2004?)

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.

Culture Change

Over the past two decades Acxiom also became well-known for its collaborative team-oriented management and work structure, leading to its being named Best Place to Work five times by Fortune magazine. In April 1993 the company inaugurated telecommuting for many of its employees. The first participant in the At-Home Worker Project was Tina Bailey.

In 1997 Charles Morgan became "Company Leader" when Acxiom eliminated job titles.

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