18 Mar 2014
The Oz of Data Opens the Curtain
Greater transparency around purchasing profiles
will benefit both marketers and consumers,
says Acxiom CEO Scott Howe.Re: Ricardo Elias (MBA 1994); Michael Gorman (MBA 1985); Bryan Throckmorton (PLDA 7)by Robert S. BenchleyTopics:
Nineteenth-century Philadelphia retailer John Wanamaker famously said, "Half the money I spend on advertising is wasted; the trouble is I don't know which half." Nearly 150 years later, Scott Howe (MBA 1994), president and CEO of Little Rock, Arkansas-based data brokerage giant Acxiom, Inc., likes to tell that story, not only for the humor inherent in Wanamaker's statement, but also because it relates directly to his business.
"That's a data problem," Howe says. "Business, like life, is full of decisions. Almost every decision you are asked to make, if made in a vacuum, has a high probability of being the wrong decision. If you can apply some data, you will heighten your probability of making a better decision."
Howe isn't speaking theoretically. Today companies like his can capture, store, and analyze massive data sets, group individuals with shared characteristics, and predict their future purchasing activities in ways never before possible. The information is then sold to corporate marketers. Combining that capability with input from social media, such as a partnership with Facebook that Acxiom announced in early 2013, adds real-time analysis to historical numbers crunching.
Acxiom, say analysts, has constructed the world's largest consumer database. Nearly 25,000 servers track data on 700 million consumers worldwide, including most US consumers, assembling approximately 1,500 data points per person. Even if you use different screen names, the company can identify you by your purchase patterns and assemble a profile. Wanamaker was simply living in the wrong century.
But it's also a time when the NSA's eavesdropping has many worrying that, on some levels, Big Data is really Big Brother. Those calling for greater transparency and individual participation in personal data collection have a surprising ally: Scott Howe. Why? Because it's good for business.
"How people think about data is going to change seismically in the coming years," says Howe. "Each of us will manage the data that is created around us. We'll think of it like changing the oil in our car, or making sure the doors are locked at night, or that we eat right every day. If we do that, every experience we have will be richer, because we are communicating better about our preferences."
To that end, Howe, who took the helm at the traditionally secretive Acxiom in 2011 after running Microsoft's online advertising business, began steering the company on a dramatically new course last year. In September 2013, Acxiom unveiled the beta version of a free website called AbouttheData.com, which gives individual consumers an unprecedented look at some of the information in their file. Visitors, after proving their identity, can review the information and correct it if necessary, or they can request to be removed from Acxiom's database entirely. There were glitches and errors, but Howe calls it a good, if flawed, start.
"The only value proposition right now is control," he says. "Longer term, people who visit the site should get something else of value — better experiences with brands and companies they respect. Ethically, the site was the right thing to do, but from a relationship perspective, it's a first step toward a world in which data is not seen as scary, but incredibly valuable and transformative."
Also last September, Acxiom unveiled its beta Audience Operating System, which allows marketers to connect traditionally disconnected data across all channels — online, offline, and mobile — and which Howe says will create a truly singular view of the consumer.
"Consumers are being bombarded by irrelevant advertising at every turn," he says. "This isn't the result of marketers having too little data. Rather, it's because marketers are drowning in too much data — data that's disconnected and siloed, creating disconnected experiences. We're on a mission to end advertising waste and noise."
Howe likes to take a big-picture view of business problems, probably because of his training in economics. That process began early — at the family dinner table, he recalls — when his father, a hospital administrator with an MBA from the University of Chicago, and his mother, a nurse, often discussed economic theory, especially as it applied to health care.
An economics degree from Princeton was the springboard to a business career that began on Wall Street at Kidder, Peabody. "I learned about finance — skills I continue to draw on today — but I was still someone who knew a little about a lot of things, and not a lot about one thing," says Howe. He knew he needed to get an MBA to move forward.
"My dad once gave me a piece of advice," says Howe. "In life you collect two things: stories and friendships. When I was thinking about the right business school, I thought about what he had said. I saw the opportunity at HBS to get a lot of both very quickly. It's not just world-class teaching, but the opportunity to learn from world-class peers. In some instances, there are fellow students or guest speakers who lived through one of the cases you are reading, or were witness to it. That's priceless. If I could turn back the clock, I would spend more time getting to know more people, because I've found the friendships to be enduring and valuable."
[Howe, in fact, keeps in touch with some of his section classmates through an annual get-together organized by Ric Elias (MBA 1994), CEO of Red Ventures, a marketing and sales company that works with major brands. He also has HBS alumni on Acxiom's executive team, including Michael Gorman (MBA 1985), vice president for partner development, and Bryan Throckmorton (PLDA 2012), vice president for consulting, analytics, and digital impact.]
"You also learn how to think and communicate," Howe says. "So much about business leadership is problem solving. You have to take something really complex and break it down into separate, solvable components. HBS teaches you how to do that. It prepares you not just for business, but for life."
Howe, a towering 6'6", likens sports and business, although he admits he was an "awful" football player (tight end) at Princeton. "Business is fun because it's a competition," he says. And, as in sports, it helps to have a goal.
What's his goal? "I'm utilizing data to create better experiences for both businesses and people," says Howe. "That's certainly aspirational, but if someone doesn't dream of what life should be like, what kind of life will it be?"
Class of MBA 1994, Section F