AdExchanger: So how does Acxiom’s fledgling services business fit into this DNA?
SCOTT HOWE: The services wrapper can be built across all of our businesses. So if people are buying data, we can give them modeling services. If people are buying connectivity, we can help them find the right partners in the ecosystem, integrate those partners and help them make sense of it all.
That almost sounds like the work of an agency.
Agencies are really different from services. We’re not trying to compete with agencies. We’re providing people with advice on how to use our products and services more effectively. Sometimes that goes to direct clients. Increasingly, we give that advice to publishers and agencies as well.
So if you show up on Ad Age’s top agency list again, will you flip out?
I was embarrassed about that. That isn’t how we position ourselves. We consider ourselves a catalyst, not a competitor of agencies.
The data we give agencies can now be linked to every single touchpoint. There’s no reason an agency can’t be thinking about the call center script. Certainly an agency should be thinking about email, direct mail and banner search, all holistically, so they can create campaigns that are seamless.
Even if agencies are ready for that, are their brand clients ready to sign on?
Increasingly they are. We work with one major financial services company who is starting to organize not by functional silos like email or direct mail or display, but by customer segments. They’ve created teams around the most loyal customers or prospects, and they’re thinking about all the different media touchpoints holistically by those customer segments.
You mentioned companies like Merkle and Epsilon are really positioned more as agencies. I see that with Merkle, but what about Epsilon?
A lot of their growth has been driven by agency. The Conversant acquisition is certainly in the tech space. But the kind of technology they do is different from what we do.
Is Conversant a competitor to LiveRamp?
I haven’t seen that in the market. We view them as an important customer. I will also say that building connectivity is hard. It requires us to do three things really well.
One: server-to-server connectivity integrations. There’s a network effect where you can’t just decide you want to be in the business. People join you to share data with other people on the grid.
Two: Even if you want to do this business, it requires incredible attention to data stewardship. You need data theft protection in place, and we’ve been thinking about that for 40 years.
The third piece is recognition. If you’re good at the first two things, it breeds more scale. The more data flows, the better you’ll be at recognition. That’s more than algorithmic logic – it’s scale.
Anybody who does enter the [data connectivity and onboarding] space will need to make up ground.
How does data connectivity work against walled gardens like Google and Facebook?
How do Facebook’s permissions differ from Google’s?
That’s a better question for them. It’s their rules that govern us.
Since Acxiom’s first deal with Starcom Mediavest Group, what have you learned?
We were so used to working with direct clients. When you work with an agency, or even publishers like Facebook, you have to learn new languages. Agencies care about ROI, the creative idea and customer segments. You have to work in their timeline, which is often fairly immediate. They need to respond to an RFP tomorrow.
Publishers care about yield and ad packages. How do you create new segments and package them to sell? We’ve had to hire people with different skill sets. With our publisher team, we hire folks with past ad sales experience. With our agency team, we hire people from the agency world.
For years, we focused on Fortune 500, sophisticated direct marketers. Now when I define our client base, it’s marketers, agencies, advertisers, publishers and enterprise software companies.
In your earnings calls, you tell investors they must be patient before seeing consistent revenue growth. What’s the timeline for that?
We’re seeing that already. A year ago, AOS [Audience Operating System] and LiveRamp was a story without proof points. We just ended a year where we had a $70 million run rate for that business. At every earnings call, we’re trying to lay out the proof points that say the things we’re doing are successful. We feel good about that with our Connectivity business, which is growing, growing, growing.
In our legacy businesses, we’ve seen an uptick in our bookings. That’s a good harbinger for things to come. But we have to deliver against that. You’re only as good as your last quarter.