Acxiom's Audience Operating System Could Reinvent Data-Driven Marketing


Archived Published: 26 September 2013 ID: G00258247

Analyst(s): |

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Summary

Acxiom's Audience Operating System for targeting customers across channels will change the way marketers analyze and use data in campaigns. But AOS raises privacy concerns, despite Acxiom's efforts to head off a backlash.

News Analysis

Event

On 24 September 2013, data services company Acxiom announced Audience Operating System (AOS), a software-as-a-service offering that combines data from multiple sources and that enables digital marketers to run analytics and applications against this data to segment and target audiences across channels. The AOS platform runs applications developed by Acxiom and its partners.

Analysis

Acxiom’s AOS is a breakthrough in multichannel marketing. It presents marketers with a comprehensive view of an audience:

  • Across channels, devices and media sources

  • With unduplicated data, enriched by detailed demographic, contextual, behavioral and social profiles

  • From both online and offline activities

Acxiom has assembled a network of data partners, including Facebook, and a technically impressive suite of applications for media planning and analytics. Acxiom has opened a substantial gap between itself and other marketing service providers. For example, a marketer could:

  • Select an audience by purchase-funnel stage, based on its own customer data

  • Find that audience at specific locations using data from a partner such as 4INFO

  • Issue mobile offers tailored to demographics

  • Track results at participating cash registers

There’s only one way to connect individual profiles across devices and channels: relate them to a common record containing personally identifiable information (PII) from the customer database of a company that has it. This approach requires server-to-server integration among partners. It comes against a backdrop of events that cast doubt on the future of third-party cookies (TPCs), the incumbent method of connecting behavior across websites relied on by hundreds of companies in online ad targeting. AOS eliminates the need for TPCs, which has some privacy appeal, but it’s unclear how the privacy community will respond to AOS’ use of PII and first-party data.

Acxiom has decades of experience dealing with privacy issues — it was the first to hire a chief privacy officer over 20 years ago — and has taken many steps to head off any backlash:

  • In September 2013, it launched aboutthedata.com — a website giving consumers access to a portion of the data Acxiom has collected with options to opt out or correct it (see www.nytimes.com/2013/09/05/technology/acxiom-lets-consumers-see-data-it-collects.html ). Acxiom claims that, after over 150,000 visits, 1.5% of consumers have opted out.

  • It has constructed an elaborate structure of encryption and controls, which it calls a Safe Haven, to prevent leakage of PII among AOS participants.

  • It emphasizes the role of consumers, who will get some form of control (what that will be is not yet completely clear) over the brands they authorize to maintain personal relationships.

Nevertheless, risk remains high that some marketers and consumers may misuse, mistrust or misunderstand this new marketing power. Gartner does not believe that this risk will outweigh the market-wide economic benefits of one-to-one marketing, but it could damage incautious or unlucky participants.

Recommendations

Marketers:

  • Plan for a new order in which targeting and campaign execution are consolidated into a single platform. Rethink your relationship with agencies and organizational structures that tend to silo marketing functions by channel.

  • Focus on updating policies governing novel uses of first-party data. Understand the value of first-party data and the implications of data leakage. Seek consumer permission to share data with partners and offer transparency as to what that implies.

Ad tech entrepreneurs and investors:

  • Consider strategic options for the increasingly likely scenario that TPCs will be replaced by large data exchanges operated by companies such as Acxiom and Google.

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