Here's What's Behind Acxiom's Growth and Increased Investor Interest

When data giant Acxiom scooped up data onboarding company LiveRamp in 2014, it felt like the pieces were finally falling together for Acxiom CEO Scott Howe. The company had shed its information security business and still planned to divest other divisions that detracted from Mr. Howe's strategic mission to remake the Little Rock-based firm into the streamlined agency-friendly data services firm of tomorrow. The former corporate VP-advertiser and publisher solutions at Microsoft, then on the job at Acxiom for three years, told Ad Age, "This is a big acquisition for us." It was almost an understatement. LiveRamp has become a major growth generator for Acxiom, which had it not innovated by realigning its focus around what the industry has come to call "people-based marketing," could be languishing as a washed up data broker. In August, Acxiom reported Q1 2016 revenue for its Connectivity business, led by LiveRamp, was $31 million, up 52% compared with Q1 2015. The division has around 300 customers, according to recent earnings reports. While Acxiom remains one of the largest aggregators and suppliers of third-party data, its LiveRamp acquisition propelled it toward Mr. Howe's goal to become a conduit for connecting offline, personally identifiable data to digital channels. It helped spur intense interest in this type of service by a variety of brands with huge customer databases but a lack of knowledge or wherewithal to use that information to find those customers across channels and reach others like them. Several large investors have boosted their ownership of Acxiom shares in recent months. The company's stock price has risen about 50% in the past two years and around 32% over September 2015, to nearly $27. "When the current management team came to the company, Acxiom was more focused on implementing large CRM databases and gathering and analyzing and selling third-party data," said Brett Huff, managing director and research analyst at Stephens, Inc., which maintains a market in the common stock of Acxiom Corp. The big change came when the firm bought LiveRamp, he said. LiveRamp, which Acxiom bought in 2014 for $310 million, is in the business of "on-boarding," the process of connecting consumer records gathered offline into information that can be used to communicate with those customers via email or targeted digital ads, to optimize website pages or measure the impact of digital ad campaigns on offline sales. The offline data comes from auto leads, retail transactions or banking relationships, for example. One reason Acxiom bought LiveRamp was because it serves as a linchpin not only for matching client data but for creating ready-made applications for Acxiom's own data offerings. "It just makes it easier to push our data to where it can be purchased," Acxiom's VP-corporate strategy, David Eisenberg, told Ad Age. The LiveRamp platform is integrated with hundreds of ad targeting, email marketing, site optimization and campaign analysis platforms. This openness to align with software providers and agencies with complex ad tech systems is a deliberate choice touted by Mr. Howe in recent years. "My message to all of the world's great agencies has always been simple. We don't compete with agencies; rather our goal is to empower them. My message to enterprise software companies is similar. We're not creating our own monolithic marketing stack, rather our intent is to power and connect their stacks to the world," he said during Acxiom's Q1 2017 earnings call in August. During the call, he discussed the just-announced sale of its email services business, Acxiom Impact, to Zeta Interactive, which some partners including Oracle and Salesforce considered an uncomfortable competitor with their own email services. "With today's announcement, I am reinforcing our commitment to open partnership," said Mr. Howe. "Acxiom is an open provider of technology and services, ready to provide the data foundation for any marketing stack, any creative agency, and any provider of campaign execution services." The Impact business was "the last holdout of things that came into conflict," said Mr. Eisenberg. Referencing partners like Adobe and Salesforce, he continued, "They said, 'Why are you in this business?'" Indeed, Acxiom sees its role as a virtual coupling for the marketing data world's pipes, and the material from which that connector is forged is personally identifiable data: names, email addresses, social media identifiers. As early as 2013, the company placed bets that information directly linked to individuals such as purchase history or loyalty card data was more valuable than the web's standard cookie-based currency. Behavioral data used for online ad targeting is "ephemeral," Phil Mui, Acxiom's former chief product and engineering officer, told Ad Age at the Interactive Advertising Bureau's annual conference in February that year. Acxiom competitors including Experian, Alliance Data Systems-owned Epsilon and Dentsu-owned Merkle, are champions of this concept in their own ways, but each has taken a different approach from Acxiom's promise of agnostic data unifier. "This concept of people-based marketing, the idea of brands targeting people vs. cookies," said Mr. Eisenberg, has become "one of the more mainstream ideas." He added, "A cookie doesn't buy something from Banana Republic or Macy's, but a person does."

Here's What's Behind Acxiom's Growth and Increased Investor Interest

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