Acxiom Corporation History
P.O. Box 8180
Little Rock, Arkansas 72203-8180
Telephone: (501) 342-1000
Toll Free: 800-922-9466
Fax: (501) 342-3913
Incorporated: 1969 as Demographics, Inc.
Sales: $964.5 Million (2000)
Stock Exchanges: NASDAQ
Ticker Symbol: ACXM
NAIC: 51114 Database and Directory Publishers; 54186 Direct Mail Advertising; 541611 Administrative Management and General Management Consulting Services
Acxiom Corporation recognizes that to enjoy the freedoms of our society, one also must embrace its responsibilities. For instance, the free flow of information is a cornerstone of our society and has contributed to tremendous consumer benefits and economic prosperity. Yet, this freedom must be accompanied by respect for the laws and regulations that protect consumer privacy. It is this belief that has driven Acxiom to be a leader in addressing consumer privacy concerns and earning the trust of the public--while preserving the open system that has served the best interests of our country and its citizens for more than two centuries. Key Dates:
- Company is incorporated in Arkansas as Demographics, Inc.
- Demographics begins processing for the direct mail industry.
- Company name is changed to Conway Communications Exchange, Inc.
- Company is reincorporated as CCX Network, Inc. and makes first public offering.
- CCX acquires Southwark Computer Services, Ltd., UK.
- Name of company is changed to Acxiom Corporation.
- Acxiom begins strategic alliance with The Polk Company for providing data center management.
- Company enters agreement with Oracle Corporation adopting Oracle's OLAP to its data warehousing and decision-making methods.
- Fortune for the second straight year places Acxiom on its list of '100 Best Companies to Work For.'
Acxiom Corporation--Acxiom is a registered trademark--is a leading provider of information management services and solutions to large corporations dependent upon consumer and business databases stored and managed through computer technology. The company identifies its 'core competencies' as customer data integration, innovative database marketing services, infrastructure management, premier data content, and integration technologies. Structurally, Acxiom is made up of four operating divisions: Data Products, Services, and Financial Services, based in Arkansas; and Outsourcing, based in Downers Grove, Illinois. Other major business locations include Phoenix; Paris; London; Sydney, Australia; and Sunderland, England. Within this framework, the company maintains an expanding network of operations with several locations in the United States and abroad. Among other things, it provides access to information on all but a small percentage of households in the United States. Its primary client base has been and remains Fortune 1000 companies in the financial, insurance, information service, retail marketing, publishing, healthcare, media, automotive, and telecommunications fields. Numbered among these corporate clients are AT & T, Advance Publications, Allstate Insurance, Bank of America, Citigroup, Conseco, Federated Department Stores, First USA Bank, General Electric Capital Corp., IBM, The Polk Company, Proctor & Gamble, Sears, Trans Union LLC, and Wal-Mart Stores.
1969-75: Founding and Early Development
Axciom's history may be traced to 1969, when Charles Ward, an industrialist, founded Demographics, Inc., in Conway, Arkansas. One of his main purposes was to develop a mailing list parity with the Republican Party for the Democrats. In its early years of development, Demographics was primarily a data processing company, serving, among other clients, the local bus manufacturing company. Both physically and financially, it was a small operation, housed in a 6,000 square-foot building that contained the company's single computer and printing press.
In 1975, when his business investments were faring poorly, Ward sold Demographics to the company's management, which was then under the leadership of Charles D. Morgan, who had joined the company in 1972. Morgan succeeded Ward as president and CEO. At the time, the company's revenue was $1.2 million. In order to grow into what Morgan hoped would be a $10 million operation, the company took on any and all jobs, no matter how small. It processed the payrolls for most Conway businesses of any size and handled the billing of the local utility company, Conway Corp. It continued to support campaign and fund-raising efforts of the Democratic Party, the main focus of its enterprise. The only year-round direct marketing customer was Diamondhead, a Hot Springs, Arkansas, land developer.
1976-85: Changing Focus and Going Public
The new owners faced serious problems. Loss of income due to changes in election laws and the near shutdown of Diamondhead compelled Morgan and his associates to take salary cuts and reconsider what Demographics should do, not just to recover but to prosper and grow. Their decision was to concentrate on one specialty: nationwide direct-mail marketing. Morgan went to New York, where he met with David Florence, the founder of Direct Media, Inc. DMI's operation inspired Morgan to create what would emerge as the List Order Fulfillment System (LOFS), the country's first fully-automated, on-line system used to generate mailing lists. When David Florence, LOFS's sole customer, decided to sell Direct Media's yellow pages business, the company had no choice but to buy it.
In the early 1980s, Demographics was still very much a company discovering itself, trying to determine what paths to take in what was an exciting, wide-open field: computer-based, information management. Reflecting a kind of strategy shadow boxing, in 1980, the company changed its name to Conway Communications Exchange, Inc., then changed it again in 1983, when it went public, to CCX Network, Inc.
Its necessary dependence on an ever-changing computer technology simply drove the company's continuing need to reassess its opportunities and redesign itself. The volatile nature of that technology made it a tough task and occasionally led to some poor results. For example, in 1983 the company spent about $1 million exploring the possibilities of electronic mail, money that was finally written off as wasted.
1986-91: Acquisitions and Changing Strategies in Economic Turndown
The earnest growth of CCX began in 1986, after Phil Carter, joined the company as president. Morgan and Carter, who was previously a regional manager for IBM, put it on the fast growth track through acquisitions and new tactics. Until that time, the company had only its regional identity, confined to Conway. By July of 1988, it had branches in Ocean, New Jersey, and Philadelphia, plus two locations in the United Kingdom, and it had tripled its workforce. Its activity and bustle through the 1980s repeatedly gained it recognition by Forbes as one of 'The 200 Best Small Companies in America.'
During the economic slump of the late 1980s, Acxiom put into place its chief marketing strategy of aggressively seeking major corporate clients that could benefit from shifting their database management tasks to an external agency in order to concentrate on their core businesses. Acxiom hoped to expand its traditional sales base with long-term contracts offering both stability and high yields. First, however, it had to weather some problems, including the poor performance of its BSA, Inc., the full-service catalog company in Ocean that it had purchased in 1986. After three years, and a $6 million investment in BSA's warehouse, Acxiom decided to close down the operation. The company also faced other problems. Notably, one of its major financial services clients, was suffering financial woes and cut back on Acxiom's services. Rising costs, including postal rates, and recession-caused cutback in clients' advertising budgets also took their toll. By 1991, Acxiom was reeling, cutting back on its own operations and paring its workforce. The worst period was during the early part of 1991, when the company's stock plummeted to a low, at one point, of $11 per share.
1992-2000: Recovery and Further Rapid Growth and Expansion
The core-based strategy of seeking major corporate clients and long-term contracts started paying off in the mid-1990s. After a financial revival between 1993 and 1995, Acxiom began a period of phenomenal growth in both size and earnings. Its revenue grew from $89.7 million in 1990 to $964.5 million in the fiscal year ending in March 2000. Much of the increase came in the last two years, when the company's revenue doubled. Although the company recorded a loss in 1999, its net income between 1998 and 2000 rose from $35.6 million to $90.4 million. Acquisitions in the second half of the decade accounted for some of the increase, but most of it was generated from internal growth. Its surging profits started in 1993, after the company overcame a couple of lean years by securing major long-term contracts with Trans Union Corp. and Allstate Insurance Co.
In 1996, Acxiom made two significant purchases, both of which became effective in April of that year. It bought all the assets and assumed some of the liabilities of its old corporate friend, Direct Media Inc., which, by that time, had become the largest list management and brokerage firm in the world. Besides managing and brokering lists, DMI offered various list-consulting services to its mail marketing clients. Acxiom would later, in 2000, become a minority owner of DMI. Acxiom also purchased all of the outstanding capital stock of Pro CD, Inc., a Massachusetts-based company that provided a variety of reference data on CD-ROM, batch, and on-line, notably information taken from U.S. and Canadian telephone directories and maps. The purchase of Pro CD provided Acxiom with entry to two new markets: Small Office/Home Office (SOHO) and the Internet.
In addition to the company's acquisitions, 1996 saw Acxiom enter an agreement with Oracle Corporation. The arrangement joined Acxiom's consumer-based data warehousing and decision support abilities with Oracle's database and on-line analytical processing (OLAP) prowess. The venture illustrated Acxiom's strategy of partnering with other companies for their mutual benefit through combining their complementary capabilities. According to CEO Morgan, Oracle's OLAP technology added 'a multi-dimensional view to the customer knowledge' that Acxiom provided to marketers, making data accessible and usable in any or all departments. Such partnering arrangements, at times temporary, have made Acxiom's corporate identity an ever-shifting phenomenon.
Acxiom's acquisitions and partnering arrangements continued over the next three years. Among other purchases made in 1997, the company bought Buckley Dement, L.P., a marketer of direct mail services for the health care and pharmaceutical industries. It also bought the assets of that company's affiliate, KM Lists, Inc. Other purchases included Normadress, a small French company, and two other direct media companies: National List Protection and MultiNational Concepts. It also formed an alliance with American Business Information, selling ABI its retail portion of Pro CD, Inc.
In 1998, Acxiom acquired May & Speh Inc., its chief competitor. Purchase of that Illinois-based company for about $625 million in stock greatly enhanced Acxiom's ability to analyze marketing data that throughout its history it had been mining for its corporate customers. It also made the company the world's leading database marketing service provider. In addition, the move improved Acxiom's recruitment potential, giving it a major data center in the Chicago suburb, Downer's Grove. May & Speh's 'Quiddity' system combined with Acxiom's Data Network promised to give Acxiom's customers the ability to access and interpret data over the Internet, a service capability that provided the company with 'the missing piece of its corporate puzzle.'
In fact, Acxiom's Data Network and its associated linking technology was one of the company's chief initiatives in the late 1990s. The Data Network was designed to provide Acxiom's clients with cost-effective 'real-time desktop access to actionable information over the Internet,' allowing it to add middle market companies to its client base. The purchase of both Pro CD and May & Speh had been significant steps in that direction.
A major problem that Acxiom had to confront in the 1990s was a growing, nationwide movement to protect consumer privacy, a concern exacerbated by the increasingly invasive and aggressive actions of both corporate interests and governmental agencies. Because the company provided much of the data and analysis marketers use, it faced potential problems, including the curtailment of its business through legislative action. In fact, it got some bad press over the fact that it had stored information about consumers who had attempted to protect their privacy by not listing their telephone numbers. Acxiom was sensitive to the issue, however, and diligently sought a balance between providing marketers with their desired data and safeguarding consumer rights to privacy. Among other things, Acxiom has worked with the Direct Marketing Assn. (DMA) to help ensure consumer approval of how some data are used. It has also protected consumers through its insistence on 'opt out' clauses that allow consumers the right to have their names removed from marketing databases.
In 1999, the company also had special charges associated with the May & Speh acquisition, which resulted in a fairly large net loss and, in August, a fairly sharp drop in its stock price that prompted a law suit on behalf of its shareholders. The drop was in part driven by an article in Barron's critical of the company's supposed flaws in its financial practices and its tardiness in collecting payment from its clients. Another contributing factor was the company's announced layoff of over 200 of its 'lowest contributors.' Short sellers may also have had a hand in driving the stock price down.
The problems did not deter Acxiom's growth, however. Excluding the special charges associated with the May & Speh acquisition, Acxiom established a pattern of delivering record revenues and earnings every quarter beginning in June 1991. Before the stock decline, the company had purchased Computer Graphics, Inc., a private, Phoenix-based firm with a database of 120 million households. During the year it also purchased Horizon Systems Inc., and Marketing Technology, S.A. in Spain. In addition, it entered new alliances, including a strategic partnership with Dun & Bradstreet. Under the agreement, Acxiom would provide its InfoBase for D & B's clients and acquire business marketing information in return. That arrangement came on the heels of other alliances with Abacus Direct Corp. of Broomfield, Colorado and E.piphany of Palo Alto, California. Moreover, the green light was still on for Acxiom's physical expansion, including its planned construction of a $25 million complex in downtown Little Rock to be completed in 2002. By the year's end it had already completed two other Little Rock projects--a building on the west side of town that accommodated abut 270 employees and its new headquarters, Acxiom Plaza, housing another 75 associates.
If Acxiom stumbled a bit in 1999, by 2000 it was back on track and running harder than ever. Its revenue and net profits for the fiscal year ending in March shot up dramatically, allaying concerns over its corporate health. Its robust recovery was also reflected in its stock price, which climbed to $35 per share in early March. New technologies, including the AbiliTec customer data integration technology, and new alliances promised even brighter prospects. For example, in January 2000, the company formed a strategic alliance with Active Software Inc. that would allow it to provide its clients with instant, real-time access to their customers' data through its eCRM solution, Solvitur Enterprise. This and other moves argued that Acxiom was going to remain a very resourceful and growing operation for years to come. A unique, team-oriented culture also resulted in Acxiom being named by Fortune as one of the best places to work in America in 1998 and 1999. Moreover, in 2000 Computerworld recognized Acxiom as one of the 100 best places to work for in information technology.
Principal Competitors: Experian Information Solutions Inc.; Harte-Hanks, Inc.
- Haman, John, 'Acxiom to Pay $625 Million for Chief Rival,' Arkansas Business, June 1, 1998, p. 1.
- Novack, Janet, 'The Data Miners,' Forbes, February 12, 1996, p. 96.
- Olberding, Sara, 'What Makes Acxiom Corporation Such a Success,' The Journal for Quality and Participation, November/December 1997, p. 46.
- Parham, Jon, 'Did Short Sellers Help Push Down Acxiom Stock?' Arkansas Business, September 6, 1999, p. 16.
- Parham, Jon, 'Record Revenues Fail to Deter Acxiom Suits,' Arkansas Business, January 31, 2000, p. 10.
- 'Pro CD, Inc. Acquired by the Acxiom Corporation,' Information Today, May 1996, p. 39.
- Reagor, Catherine, 'Arkansas-Based Acxiom Corp. Acquires Phoenix-Based Computer Graphics Inc.,' Knight-Ridder/Tribune Business News, June 18, 1999.
- Waldon, George, 'Acxiom's Turnaround--Will It Continue?,' Arkansas Business, November 16, 1992, p. 1.
- Walker, Wythe, Jr., 'Acxiom's Growing Pains,' Arkansas Business, February 4, 1991, p. 28.
Source: International Directory of Company Histories, Vol. 35. St. James Press, 2001.