|Acxiom Corp: The 'faceless organization that knows everything
An Arkansas company you've probably never heard of knows more about
you than some of your friends, Google, and even the FBI — and it's selling
Week | June 20, 2012
When you think of the surveillance state, you usually think of snoopy
alphabet-soup government agencies like the FBI, IRS, DEA, NSA, or TSA,
or cyber-snoops at Facebook or Google, says
Natasha Singer in The New York Times. But there's a company
you've probably never heard of that "peers deeper into American life,"
and probably knows more about you than any of those groups: Little Rock–based
Acxiom Corp. Jeffrey Chester at the Center for Digital Democracy has dubbed
Acxiom "Big Brother in Arkansas," while Gizmodo's
Jamie Condliffe calls it the "faceless organization that knows everything
about you." Here's what you should know about the company:
What is Acxiom Corp., and what does it do?
The company fits into a category called database marketing. It started
in 1969 as an outfit called Demographics Inc., using phone books and other
notably low-tech tools, as well as one computer, to amass information on
voters and consumers for direct marketing. Almost 40 years later, Acxiom
has detailed entries for more than 190 million people and 126 million households
in the U.S., and about 500 million active consumers worldwide. More than
23,000 servers in Conway, just north of Little Rock, collect and analyze
more than 50 trillion data 'transactions' a year. "In essence, it's as
if the ore of our data-driven lives were being mined, refined, and sold
to the highest bidder, usually without our knowledge," says
The Times' Singer.
What kind of data does it have?
"If you are an American adult," says
Singer, "the odds are that it knows things like your age, race, sex,
weight, height, marital status, education level, politics, buying habits,
household health worries, vacation dreams — and on and on." It does more
than collect that information, though. It uses it to pigeonhole people
into one of 70 very specific socioeconomic clusters in an attempt to predict
how they'll act, what they'll buy, and how companies can persuade them
to buy their products. It gathers its data trove from public records, surveys
you've filled out, your online behavior, and other disparate sources of
information, then sells it to banks, retailers, and other buyers.
Do other companies do this, too?
Yes, it's a very competitive and lucrative business — Acxiom reported
a $77.26 million profit last fiscal year, and it's the No. 2 company in
the business, after Epsilon. But analysts say that Acxiom has the world's
largest database on consumers. "There are a lot of players in the digital
space trying the same thing," Piper Jaffray analyst Mark
Zgutowicz tells The New York Times. "But Acxiom's advantage
is they have a database of offline information that they have been collecting
for 40 years and can leverage that expertise in the digital world."
Is this legal?
Yes, but the Federal Trade Commission is asking Congress to step in
to make the data-marketing industry more transparent. Unlike consumer reporting
agencies that compile and sell your credit score, date-miners like Acxiom
don't have to tell individuals what they know about them. Privacy and consumer
advocates say that's troubling, since the companies are selling sensitive,
potentially embarrassing, and possibly false information about you, and
you can't correct errors. As FTC chairman Jon
Leibowitz says, Acxiom and its peers are "the unseen cyberazzi who
collect information on all of us," and we should have the right to know
what they've found.
How sketchy is this?
If you're worried about Google or Facebook tracking you online, or
holes in your iPhone security, this is much worse, says
Gizmodo's Condliffe. We sort of knew that commercial data-miners
existed, but "Acxiom operates on a terrifying scale," and it's very likely
that the company has an ever-growing dossier of 1,500 data points on you.
The Times' "alarmist piece" about Acxiom conspiring to serve you "extremely
accurate ads" would be more frightening, says
Kashmir Hill at Forbes, if, on the same day, on the same page,
the paper hadn't run "an alarmist piece about how it's impossible to know
a person's age online, and thus impossible to keep creepy old pedophiles
from lurking on kids' sites." Well, which is it? The media is sending mixed
message on the state of online privacy, and this is just one extreme example.