"Cookies Don't Buy Things": A Conversation with Acxiom CEO Scott Howe

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Howe: Acxiom will invest in AOS
Howe: Acxiom will invest in AOS

Acxiom CEO Scott Howe has a lot to say about the potential cookie-less world and the future of privacy and data management in America.

Is the deprecation of cookies a net negative or net positive to the online marketing and advertising industry?

It depends on one's perspective. There are going to be mega-changes in the industry regardless of what happens, primarily by cookie life being shortened. On the negative side of the ledger, there's a thriving ecosystem in the online world that depends on cookies, particularly if you're a smaller publisher, an ad network, if you're a DSP (demand-side platform) or an online DMP (data management platform). Losing access to those cookies makes those jobs much more difficult.

The flip side to it, is that it's accelerating a trend that had to occur: the recognition that cookie information in and of itself is incomplete information. Meaning, you're only getting a small sliver, a small silo, of what's actually useful.

Can you explain?

Cookies don't buy things. People do. If you just rely on cookies, chances are you're not getting a good snapshot of who a person is and how they behave. It blurs distinctions across devices and channels and households because it doesn't get down to the individual level. As more and more marketers realize that to have an effective conversation with their audience, they need to identify that audience across online and offline touchpoints, across any channel and device, the natural implication of that is that cookies, as they exist today, just aren't sufficient. You need something more powerful and useful and permanent.

Do any of your clients use cookies as the primary method of tracking?

(Laughs) I don't think anyone views cookies as a great method of tracking unless you're an online pure play. When you rely on someone to walk into a car dealership or you're hoping that someone walks into a physical store, or you're hoping that someone has a conversation with you over the phone, what good is a cookie? It's completely insufficient information.

How will the development of new identification standards, like Google's AdID, affect advertisers and marketers?

What we're going to see is a wave of consolidation from hundreds of thousands of cookies to a smaller set of mega-cookies. What Google and Microsoft, and what Amazon and Apple and eBay will likely do, is very smart. They're trusted brands and can make a connection between online and offline, use that to anonymize things and better the experience for customers.

Is it worrisome that control over these standards are centered around a few business entities?

There are some who worry that Google is setting themselves up between consumers and businesses. There's a fear it gives too much power to Google, but I don't believe that's true, as long as there are multiple parties a person wants to have a relationship with. It's like free trade: You have a world economy where every company is good at manufacturing certain things, if you open up your borders and trade, economic theory suggests everyone is better off. The same thing is true here. If you have a Google or Yahoo or Amazon mega-cookie, they'll be better off.

Does that threaten Acxiom's business at all?

It's not a threat to companies like Acxiom. There's still a need to tie these disparate things together. We see the natural evolution and I view it as a tremendous opportunity. Out of the cookie wars, there needs to be companies that are neutral, agnostic, and don't have a media bias or any skin in the game and can help companies connect information.

So companies like Acxiom will serve to link all of these mega-cookies together?

Talking about cookies isn't the right conversation. The right conversation is about connections.

I don't think the focus will be on the cookie, but on customer relationships. What companies will do is develop their own store of customer information and use their identifiers to have better conversations with their customer wherever those customers might be.

What's Acxiom's role?

If the key thing is connections, Acxiom's role is largely as a utility. You hear the word “utility” and it has bad connotations as it's a slow, bureaucratic business. I don't see that. Tell that to the phone companies in 1880 or the railroads in the 1850s. There's a function that needs to be fulfilled, which is to allow companies to connect proprietary data with trusted partners. If you have a major airline and a major bank, their information together is more powerful for a loyalty card than individually.

We'll also see, in the longer term, people being part of the connection, not just companies managing it. Some of these data sets are consumer permissions about what companies they want to have relationships with, who they want messages from, and what information they want to share.

Who will control the system through which consumers regulate their information?

That's what the industry has wrong—businesses want to control this, but really consumers are going to control this and we're just along for the ride. As companies think of their database architecture and CRM strategy, they'll need to wonder how to engage with their audiences to get their permissions so they can have better experiences.

And certainly doing it as scale is easier for consumers to manage.

Can you elaborate on that?

Today a company like Acxiom pays data suppliers tens of millions of dollars each year for information that quite frankly is often wrong. I'd much rather have relationships with people and compensate them for the information.

A lot of companies have made a run at this in recent years and I don't think they've been tremendously successful. The answer has to be about how you bring a consortium together to provide value. What's valuable for one person might not be valuable for another.

Is AboutTheData.com the first step in creating that relationship between consumers and their data?

Quite frankly, what we've been talking about isn't the intent of why we did it. We did it because we believe it's the right thing to do. How can we work in an industry that prides itself in connecting people to businesses and vice versa and not have the voices of those people be heard? It's like being a date matchmaker and not knowing who you're setting up on dates. Ethically, it was the right thing to do to give people more visibility and control over the data that's collected about them.

Do we see an evolutionary path for AboutTheData? Absolutely. One reason we didn't brand it as Acxiom: We took a page out of what the credit bureaus did [which have unfamiliar brand names]. They created FreeCreditReport.com.

To your more immediate question: Is this a first step? We still have [AboutTheData] branded as a beta so in the spirit of full disclosure, it's more of a first half-step.

Still, consumers aren't exactly diligent about managing their privacy or data. Will that change?

We are, to use a metaphor, at 1982 with the PC. Consumers know it exists. Some of them say it's interesting and they should be smart about it. And we're going to wake up 10 years from now and, just as the PC became ubiquitous and part of our lives and changed a whole bunch of things about how we lived, we'll find that data is a part of our lives. As a consumer, I'll think about data the same way I think about maintaining my car or keeping my house in good shape or my personal grooming habits. It'll be part of our hygiene, so of course people will manage their preferences and in doing so they will have better lives.

To date the conversation around privacy and data has always been painted as a negative thing. I believe it's going to flip. Consumers will know they get access to content, better offers, free downloads, and better relationships with the companies they love. They'll have unique access to stuff instead of conversations with companies being annoying and irrelevant. It's like everyone is looking out for my interests. What a great flip where something went from kind of concerning to kind of wonderful.

NSA-related activities, however, are creating a stir. Is there some worry that this negativity will bleed over into Acxiom's industry?

That's one of the concerns, quite frankly. People don't necessarily make the distinction between different types of data: marketing data [versus] preference data. I believe over time it's got to be consumer managed. People have to exert a voice and in so doing it makes their lives better. That is such a hugely different proposition than what's going on in the NSA world where you don't have control, you don't know what's being done, and you get the suspicion that whatever is being done will harm, not help you. A big contrast can be painted here: Marketing data put in your hands can be used for good.

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