Mining The Mind Of Acxiom CEO Scott Howe

Editor’s note: This interview is the cover story of the latest magazine edition of Talk Business Arkansas, which you can read online here.

“Disruption” is a word that most use to describe their power being knocked out in a storm.  For Acxiom CEO Scott Howe, disruption is just another day at the office.

Howe, 46, has been dealing with disruption throughout his business career. It’s a quality that has attracted him to many jobs and it has him sitting in an ideal situation leading one of the largest tech firms in Arkansas and on the planet.

Through layoffs as he works to restructure an aging business model to Congressional inquiries on privacy and big data, Acxiom’s leader knows that he is sitting in the captain’s seat of a ship going through a sea change of digital transformation.

“Technology creates disruption,” Howe said in a recent one-on-one Talk Business interview. “I’ve grown up in the most technologically disruptive decades in history.”

SHAPING THE CEO
It’s true.

Howe grew up in Wisconsin, the son of a hospital administrator and a nurse. There wasn’t a “road to technology” that catapulted Howe into the tech industry, but kitchen table talks with his father in the evenings shaped a young man’s perceptions of the business world.

Regularly, Howe said they would talk about the evolution of healthcare.

“Even going back to the 70’s, we’d talk about the disruption that technology was having on the traditional business in caregiving,” he said. “Through his eyes, I started to understand what were disruptive forces in business. How even the best businesses – if they didn’t change and evolve over time – would slowly wither and die.”

After graduating magna cum laude with a degree in Economics from Princeton and a MBA from Harvard, Howe contemplated his career path in adulthood.  A five-year stint in international strategy consulting led to jobs in online advertising in the late 1990’s through the mid-2000’s.  It was a burgeoning field, new terrain in a blooming digital world that was redefining marketing and consumer purchasing power in the Internet age against the stolid world of TV, radio and print.

Microsoft Corp. eventually came calling with Howe serving for nearly three years as Corporate Vice President of Advertiser & Publisher Solutions.  He also has to his credit the title of co-founder of two online projects.

Fast forward to March 2011 when Acxiom and then-CEO John Meyer cut ties.  Three months later, Howe was selected as the replacement for Meyer, who had served a little over three years succeeding iconic Acxiom founder Charles Morgan.

“There’s a saying in football: You don’t want to be the guy who replaces John Elway. You want to be the guy who comes in after Bubby Brister,” Howe said in reference to the successor to the legend.

Howe and Morgan have a close relationship.  At a March investor conference held by Delta Trust and Bank, the two men sat next to each other during lunch and ribbed one another before Howe’s presentation.  They meet regularly throughout the year to discuss the company, the industry and the world’s ever-changing technology landscape.

COMING FULL CIRCLE
Acxiom is a busy place.  Consider these stats from the company’s corporate filings:

• Acxiom maintains 15,000 databases for 7,000 global clients;
• It executes more than 1 trillion global data transactions per week;
• It can provide insight into 700 million consumers worldwide; and
• Every year, Acxiom performs nearly 11 trillion consumer record updates.

Late last year and early this year, Acxiom made a move to slice $20-$30 million from its bottom line after several struggling quarters and some company-defined “bad luck” with its core IT business. Acxiom lost some of the business to its clients pulling services in-house, while several contracts were lost to competitors.

“This is obviously not the result we worked for, nor is it acceptable,” Howe said in a July 2013 earnings call.

By November, Acxiom announced it would streamline operations through altered workflows and management restructuring – corporate speak for layoffs – which filtered into the first quarter of 2014. The company severed an estimated 250-300 jobs with a sizeable portion of those workers coming from the Arkansas workforce.

Acxiom still employs more than 6,000 worldwide.

Howe said the layoffs have the “single greatest disappointment” he’s had since joining Acxiom, but he argues that the moves had to be made to re-position the firm for the future.

The money from the job cuts and reorganization is expected to be invested back into Acxiom for research and development.  Howe contends that when he came on board the company was only spending three-tenths of a percent of its revenue on new products and ideas. Companies like Apple and Google, he says, spend up to eight percent of annual revenue on innovation.

“Great companies see these megatrends occurring and over time they prepare for the technological disruption,” Howe said.  “On the one hand, we’ve been aggressively hiring and on the other hand we’ve had to make some hard decisions.  They’re the worst.  Obviously, they have consequences for real people, real families, real communities.”

In anticipation of the obvious next question, Howe said Acxiom will remain a fixture of Arkansas’ publicly-traded landscape.

“Central Arkansas and Little Rock are front and center in our future.  It’s where our headquarters will continue to be,” he confides.

What’s at work in the layoffs and restructuring?

Howe explains that Acxiom is positioning itself more aggressively for the digital age.  The technology firm that started in Conway as a direct mail marketer four decades ago has seen seismic shifts in its core business.  Now, the databases that drive the direct mail are also conducting more and more business online, and Acxiom requires workers with the skill sets to adapt to this brave, new marketing world.

“In a sense, we’re coming full circle,” Howe said. “For 40 years, Acxiom has been the leader in database marketing, particularly applied to direct mail, but there’s a disruption happening all around us where most people don’t just read direct mail anymore.”

Howe says consumers have richly diversified their media consumption habits and Acxiom must re-position itself to capitalize on the changes.

“We see television ads; we listen to the radio; we surf the web; we do Google searches; we visit social media web sites; we watch content over Netflix; we watch sporting events on ESPN.com.  And each one of those activities creates amazing amounts of data,” he says. “The things that Acxiom has always been good at – utilizing data to create better targeted marketing campaigns – can now be applied to using data to create better experiences for people everywhere across any device.  Not just at their mailbox.”

BIG DATA, BIG PRIVACY
Despite a tough inquisition from Congress and the national media, Howe says his company supports stronger privacy laws to protect consumer data.

Acxiom has been one of several companies under scrutiny by U.S. Sen. Jay Rockefeller (D-West Virginia) through the Senate Commerce Committee. Rockefeller has been holding hearings for more than a year regarding the practices of the data broker community, targeting companies like Acxiom, Epsilon and Experian.

The Little Rock-based data firm was also mentioned in a recent “60 Minutes” news report that expressed concerns about the amount and detail of data that can be collected from the public through web sites and other outlets.

Howe is fighting back.

He says that while a majority of consumers convey a “Big Brother” feeling from some data marketers, they’re also okay with it if they receive something of value in return.

“[Consumers say] I will share my information with you if in fact I get money for it, if in fact I get better offers for it, if in fact I have better interactions with companies I love,” Howe said.

Howe’s proof is the opt-out rate for the company’s initiative – AboutTheData.com, a web site that allows consumers to view boatloads of information Acxiom has about them.  Consumers can correct information in the Acxiom databases or choose to not have their information maintained.

Howe expected a low double-digit percent opt-out rate, but says less than two percent of the half-million visitors to the site have chosen to be removed.

He’s also told anyone who will listen that Acxiom supports privacy regulation of its industry if it addresses specific concerns not vague concepts.

“In every interview I have done in the last year – when I talk to ’60 Minutes,’ when I talk to CNN, when I talk to the New York Times, when I talk to the Wall Street Journal, when I talk to Sen. Rockefeller – I always say the same thing, which is: you might be surprised to learn that Acxiom is in favor of much stronger privacy regulation. And we are,” Howe said.

In recent weeks, Howe has granted interviews to different advertising industry forums reinforcing his positions.

He contends the drafts of privacy regulation laws that Rockefeller is pursuing would be worse than any of the negative consequences of federal health care reform.

“If you think about the worst part of the ACA, welcome to the data bills,” Howe told an Atlanta audience in late March. “It grants the government the ability to create a centralized consumer data portal whereby all permissions are granted,” he told the crowd. The complications of building such a portal makes the ACA look like child’s play.”

At the Little Rock Delta Trust presentation, he outlined five areas he said could result in meaningful reforms to weed out bad players in the data mining industry and ensure protections for consumers. Howe said consumers should have a “bill of rights” that includes:

• Disclosure of the data being collected about them;
• Limiting data use to marketing only;
• Restricting use of sensitive data;
• Enforcement of security and data breaches; and
• Transparency and choice for consumers.

Howe explains that the purpose of “big data” and what a marketer is trying to do with it involves improving customization for shoppers and other audiences.

“They want to capture a bunch of information so they can have a better conversation and deliver a better experience to you,” Howe said.

“The goal of a global marketer, metaphorically, is to create the world’s largest spreadsheet. One that has a single row for every person on the planet – seven billion rows. And it has hundreds of thousands of columns – one for every observable piece of data,” he noted.

Howe said as the picture of data is completed, a user of the information can customize pitches to individuals to more smartly reach the right audience in a highly personalized way.

“All we’re doing is the same stuff we’ve always been doing.  We’ve always been good at the science of marketing.  But what’s different is we’re applying it to a whole bunch of new channels and new touch points and new experiences such that the things we’ve always been good at have much broader applicability.”

Some folks would consider that a little disruptive.