Acxiom Corp.’s recent efforts to expand its social media and people-based marketing business took a major hit Thursday (March 29) after Facebook announced plans to toss the Conway-based data marketer off its so-called “partner categories” program.
In a brief statement on its website after the close of market Wednesday, Facebook announced plans to end the company’s consumer-tracking program that allows data brokers such as Acxiom, Epsilon and others to target the social media giant’s users based on their shopping habits or other data profiles.
“We want to let advertisers know that we will be shutting down Partner Categories. This product enables third party data providers to offer their targeting directly on Facebook,” the social media network giant said in a statement. “While this is common industry practice, we believe this step, winding down over the next six months, will help improve people’s privacy on Facebook.”
The Facebook news led to a major sell-off in Acxiom shares as the company’s stock fell more than 20% in Thursday’s trading. The company’s stock (NASDAQ: ACXM) ended the day at $22.71, down $5.34 or 19.04%. More than 17.4 million shares traded hands, nearly 30 times the normal volume. During the past 52 weeks, the share price has ranged between $32.93 and $18.60.
Facebook’s decision to part ways with Acxiom and other third-party data brokers comes amid mounting legal and political fallout from Facebook’s association with Cambridge Analytica, which is facing several lawsuits related to claims that it actively engaged in data mining and analysis for influencing the 2016 U.S. presidential election.
Facebook CEO Mark Zuckerberg has fought back against accusations the company was warned that Cambridge Analytica had gained third-party access to user data as early as 2011 and had misused private and personal information of millions of Facebook users.
In several media reports, Acxiom was identified as one of several data brokers that would be eliminated from Facebook’s ad-targeting tool. Acxiom did not immediately respond to a request for comment from Talk Business & Politics.
However, in a story by Business Insider, Acxiom CEO Scott Howe said Facebook didn’t give the Little Rock-based data marketer a heads up regarding the decision on Wednesday. The Arkansas tech company executive said he believes Facebook is using Acxiom and other data brokers as scapegoats for its mounting problems.
“We are getting thrown under the bus,” Howe told Business Insider. “This was a masterful political manipulation.”
Acxiom first announced two years ago it was joining the social media giant’s marketing partner program, formerly known as the Facebook PMD program. At the time, Acxiom said under the new Facebook program, marketers could take advantage of Acxiom’s marketing technology expertise to more efficiently organize partners based on their specific needs grouped by country, specialty and industry.
Acxiom officials said in a statement following Facebook’s announcement on Wednesday that the publicly-held Arkansas technology giant did not expect the change to impact its revenue or earnings for the fiscal year ending on March 31. However, Acxiom did say it expects to take a $25 million hit to revenue and profits in fiscal 2019, which begins on April 1.
In the third quarter, Acxiom reported earnings of $11 million or 28 cents per share on revenue of $235 million. In February, Acxiom announced plans to realign its business into two major divisions. LiveRamp and Acxiom Marketing Solutions will focus on data augmentation, people-based marketing, data management and strategies and analytics services.