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Acxiom Corporation: TMI?

Only a handful of us have actually heard of Acxiom, however, analysts reveal that the company’s 23,000 servers process over 50 trillion data transactions a year. The company collects, collates and analyzes consumer data about the majority of adults in the US. It’s part of the database marketing industry, a multibillion-dollar per year affair.

Who is Acxiom?

Acxiom is a publicly-traded, politically-connected, Conway, Arkansas company that’s had its share of news coverage in the past. Back in 2004, it was the world’s largest processor of consumer data, collecting and processing over a billion records a day. Its clients include high-profile banks, including Wells Fargo and HSBC, investment services, such as E*Trade, auto manufacturers, such as Toyota and Ford, and department stores such as Macy’s. Acxiom works with any major company hoping to carry out an intelligent marketing campaign.

Today, it remains a database marketing company that continues to collect and sell details about consumer’s financial status, shopping and recreational activities to banks, retailers, automakers and other companies. It’s a lucrative company, posting a profit of $77.26 million in its latest fiscal year, on sales of $1.13 billion.

Acxiom executives boast that the company holds information on over 500 million active consumers worldwide, with about 1,500 data points per person. The company also promotes a program for consumers who wish to see the information the company has about them.

According to Jennifer Barrett Glasgow, the chief privacy officer of Acxiom, the company retains consumer data in different databases. However, the system is not designed to assemble all the data amassed on a single individual. “We do not have the capability to look up an individual’s data in the system. We don’t have a search-by-name capability.”

A question of transparency

Acxiom is not the only company dealing with privacy complaints. Currently, information brokers have varying privacy policies. While Acxiom allows consumers to opt out of their marketing databases, Epsilon, another marketing services firm, permits consumers to opt out of having their data rented out to third parties. Epsilon announces that it will furnish individuals with general information about their past retail transactions, including the categories and years of purchase. However, it does not include exact product or retailer names.

Of course, policy is one thing; practice is another. Whilst Acxiom employees tout the highest privacy and security expectations, independent security experts and consumer advocates maintain that the company’s practices undoubtedly privilege corporate clients over consumers’ needs, clearly contradicting the company’s stance on transparency.

Critics say…

According to FTC member Julie Brill, consumers ought to have access to all the information that data brokers, such as Acxiom, hold about them. Consumers should also be able to access any analyses that the companies sell about their behavior.

“I include in that not just the raw data, but also how that information has been analyzed to place the consumer into certain categories for marketing or other purposes. I believe that giving consumers this kind of granularity will greatly increase consumer trust in the information flow process and will lead to more accurate processing,” says Brill.

The issue then is to create a system by which consumers can easily access with own marketing data. However, this is likely to be costly and technically challenging for data brokers. According to Stuart Madnick, professor of information technology at the Massachusetts Institute of Technology, companies would be required to develop security systems to verify a consumer’s identity, and to ensure that no one else could have access to that individual’s record. Companies would also need to be prepared to respond to people who question the accuracy of their records.

According to Professor Madnick, the questions consumers should be asking are: “How correct is the information they have and are disseminating on you? How do they know who is asking for it?”

Going further, Jeffery Chester, executive director of the Center for Digital Democracy, a nonprofit group located in Washington, argues that Acxiom is the “Big Brother of Arkansas.” Chester’s organization argues that up to now, the US government has had its hands tied, in terms of regulation and legislation.

The Center for Digital Democracy points out, “Privacy policies are an inadequate mechanism that fail to protect the public… The FTC has been largely incapable of ensuring American privacy is protected online… The uncertainty over the loss of privacy and other consumer harms will continue to undermine confidence in the online advertising business. That’s why the online ad industry will actually benefit from privacy regulation.”

Summary

This article takes a look at the Acxiom Corporation, one of the largest database marketing companies in the US. The company holds information on about 500 million active consumers around the world, with about 1,500 data points per person. One of its greatest challenges is transparency, and whilst it argues that it has high privacy expectations, security experts and consumer advocates argue otherwise.

CIPP Exam Preparation

In preparation for the Certified Information Privacy Professional/Information Technology (CIPP/IT) exam, a privacy professional should be comfortable with topics related to this post, including:

  • Determining data accountability (I.C.b.)
  • Data processing (I.F.)
  • Privacy expectations: consumer perspective and organizational practices (II.A.a.; II.A.b.)
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