Acxiom's Cross-Channel Pioneering Shows Growing Pains

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

Acxiom announced weak results for the second quarter of is 2014 fiscal year yesterday, but executives positioned the showing as that of a company in transition. CEO Scott Howe said the report was indicative of significant investments in technology and effort needed to establish its new Audience Operating System (AOS) as a foundational platform for multichannel marketing efforts.

“Clients told us they want to choose from the best of breed providers, and we want to have one system that can link it all together,” Howe said during and earnings call detailing flat results for the company's fiscal 2014 second quarter. Howe said he looked forward to a time when longtime competitors such as or IBM would become Acxiom partners by linking with AOS.

AOS, according to Acxiom, allows marketers to plan and measure campaigns across all channels, including mobile, social, display, TV, website, and email and on all devices, scalable “up to everyone in our 700 million person database,” Howe said. “This has never been done before.”

Howe and Acxiom received backup for that claim from Gartner Research in a September 26 product review proclaiming that AOS “could reinvent data-driven marketing.” Gartner lauded the system's ability to present marketers with a comprehensive view of an audience across channels with unduplicated data from both online and offline activities.

But Gartner also noted that the offering contains the built-in risk that marketers may misuse personal information and draw the ire and mistrust of consumers. Partly to forestall such eventualities, Acxiom launched, a site consumers can consult to access all information the company holds about them.

For marketers willing to assume such risk, however, a bargain pricing is currently in the offing. “Like all new product launches, customers are driving hard bargains,” Howe said. “And we want to drive adoption, not near-term revenues.”

Acxiom has aspects of the AOS platform in beta test with 20 different customers, according to Howe, three of which he said have signed contracts. He told analysts that the company had a potential $35 million in its six-month pipeline, and that it was doing limited prospecting in the agency space. “We'd bring on one [agency] and see how it worked with them before bringing on another,” he said.

Acxiom Q2 revenue was flat at $276 million and income from operations decreased by a third to $20 million. The company's marketing and data services revenue rose by only 1%, while its IT infrastructure management business declined by 5%.


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