$10B Digital revenue for 15 top networks
Data services giant Acxiom will acquire LiveRamp, which helps marketers use their offline CRM and transactional data on the web, for approximately $310 million in cash. The acquisition is the first for Acxiom under the auspices of CEO Scott Howe, who came on board in July of 2011.
A recognizable name in the lesser-known data-onboarding sector, LiveRamp acts as a data bridge, transforming real-world data into information that can be used by online technologies. The company partners with around 80 tech firms that enable things like website optimization and online audience targeting. For instance, the company has worked with campaign attribution firm Adometry, which was snapped up by Google earlier this month.
"This is a big acquisition for us," said Mr. Howe.
LiveRamp has experienced significant growth according to information provided by the company exclusively to Advertising Age. It had 116 clients using its data onboarding services in 2012, the year it was founded. Its client list rose to 223 in 2013, representing 92% growth year-over-year. And in that time, revenue grew 143%, said the firm.
Advertisers also use offline data to measure impact of digital efforts. Twitter and Facebook partner with DataLogix for attribution measurement, for instance. Signaling popularity of connecting offline data to the web to gauge ad effectiveness, Google purchased attribution firm Adometry earlier this month for an undisclosed sum, while AOL picked up Adometry competitor Convertro for approximately $101 million.
A data Switzerland
A year ago, Acxiom threw down the first-party data gauntlet during the Interactive Advertising Bureau's annual gathering, claiming that unlike the majority of behavioral data flowing online, the most valuable customer information is derived through direct interactions with them via loyalty programs, store transactions and call-center interactions. That is, data gathered directly by the party using it rather than information that comes from a variety of third-parties and merely infers what a consumer is likely to buy.
Now Acxiom seems to be pivoting on that message a bit, touting its mission to become a standard platform for all marketing-related data connections. "As much attention should be paid to what's underneath the stack, the power supply if you will, the power grid," said Mr. Howe. "Someone needs to emerge as Switzerland."
LiveRamp and Acxiom have worked together on various client projects over the past two years, and currently have clients in common. Mr. Howe argued that these days marketers "don't care about the competition. They want connectivity."
In essence that's what LiveRamp promises for Acxiom, a link to a network of audience targeting, optimization and campaign measurement tech partners.
Put simply, companies like LiveRamp and competitor Datalogix match offline databases to online data, often making the connection by using registration information gathered by travel, dating or news sites, or gaming system partners. They can also link cookies representing a user's visitation to a partner site to information in CRM databases. For privacy purposes, personal data is stripped once connections are made, and before data is delivered to ad targeting or site optimization systems.
"It's a subtle entry point into the relationship," said Andrew Frank, a research VP at Gartner covering ad tech and marketing.
Whether others in the sprawling marketing-data industry will be comfortable with the concept of one of the largest data brokers in the world serving as a standardized pipeline for data flow from offline systems to digital ones remains to be seen.
Even Mr. Howe suggested that Auren Hoffman, CEO of LiveRamp, has "got some clients who will probably be uncomfortable at first blush on hearing this announcement."
Mr. Hoffman will stay on as CEO of LiveRamp, and aims to boost the firm's staff numbers in the next couple years from its current 70 employees. "Our goal is to double this year and double again next year," he said.
Data gets on board gradually
Both firms want to be "an open, neutral party," said Mr. Hoffman. He said he expects the adoption of offline-to-online data services -- known as "on-boarding" -- to grow substantially in the next few years. He estimated around 5% of marketers currently are moving offline data to digital platforms, led by large brands in sectors that deal in massive amounts of customer data including retail, travel, telecom and financial services. LiveRamp said it moved 1.3 billion customer records to the web in March 2013, and around 3 billion in March 2014.
Mr. Howe concurred with the estimate, noting that around 5% of Acxiom's approximately 8,000 clients currently use their offline data for online purposes.
"I think it's still in kind of an early adopter phase. I don't think we've crossed the canyon on data on-boarding," said Mr. Frank.
Acxiom will facilitate international expansion for LiveRamp in the U.K., Europe and the Asia-Pacific region, said Mr. Hoffman. Not only does LiveRamp need to localize its approach to those markets, he said it needs people who understand how to navigate a maze of country-specific privacy regulations.
Past privacy hiccups
LiveRamp was spun out of digital data company Rapleaf, whose data-matching capabilities sparked controversy following a 2010 Wall Street Journal report highlighting the fact that the firm stored user names in its database. Rapleaf still exists but is no longer connected to LiveRamp, said Mr. Hoffman.
Despite ongoing pressure from government related to privacy issues, Mr. Howe dismissed LiveRamp's controversial past.
"We didn't buy RapLeaf; we bought LiveRamp," he said, stressing Acxiom's privacy initiatives including its AboutTheData system, which allows people to access some information the company stores about them, and make changes to the information if desired.
Acxiom itself has come under government scrutiny. In December, Senator Jay Rockefeller admonished Acxiom, along with other large data firms Epsilon and Experian, claiming the companies had not provided enough information on how they do business in response to a congressional inquiry.
The Acxiom transaction, subject to approval, is expected to close mid-summer. Acxiom, headquartered in Little Rock, Arkansas, will hold its 2014 year-end earnings call today at 4:00 p.m. CDT.
According to Mr. Howe, Acxiom plans to find a larger location in Silicon Valley to house both LiveRamp and Acxiom staff. "We've long wanted a second office in San Francisco," he said.