It has been described as ‘one of the largest companies you’ve never heard of’.
And Acxiom certainly has good reasons for keeping a low profile. After all, the Nasdaq-listed firm does business in rather an unpopular field: sending out junk mail.
Acxiom made the bulk of its billion dollars in sales last year conducting ‘direct marketing’ ad campaigns to the 500 million people in its database. In the past, those have mainly been Americans, but the company has a plan to add the details of hundreds of millions of Chinese to its rolodex.
Right now, Acxiom’s China arm is just 1% of the size of its US business – making around $9 million in sales in 2010. But there’s a major obstacle to redressing that imbalance: Chinese firms aren’t convinced that direct marketing is especially effective. Although about 30% of US corporations’ advertising dollars goes into direct marketing, their Chinese counterparts prefer to spend on internet, TV and mobile phones.
“[They] choose to market by SMS most often, followed by email,” John Mayer, Acxiom CEO explains, “direct mail marketing is only their third choice.”
Despite having set up shop in China 11 years ago, most of Acxiom’s clients are still foreign firms (like Walmart and IKEA). But three years ago, its China boss, Frederic Jouve, was tasked with taking the proportion of domestic clients up from 15% to 60%.
To do that Jouve needs to do two things: branch out into smaller cities and, more importantly, build a much bigger database of the names, addresses and personal details of Chinese consumers.
“If Acxiom is able to build databases in the second and third-tier markets or even in small towns and rural areas,” predicts CBN Weekly, “it will meet the needs of a large number of Chinese companies whose main market is there.”
But how does a company from Conway, Arkansas get access to that kind of information? By doing the obvious, it seems. It started talking to the Chinese postman.
In fact, Acxiom struck a deal with China Post, the country’s official postal service, writes IT Times. That might be considered as a first step to a breach of privacy in other jurisdictions, but the state agency has a powerful commercial incentive to increase the flow of mail to its customer base (even if it’s unsolicited).
“[With] the sharp fall in private letters being posted because of the internet and mobile phones,” explains CBN, “[China Post] needs to send more commercial letters to [justify its size].”
Here’s how it works: Acxiom gets access to the China Post database, and the two will share the direct marketing revenues that are accrued.
“If Acxiom finds a client then Acxiom’s share will be appropriately higher,” Jouve told the magazine, “otherwise, China Post will receive more revenue.”
And those records promise to revolutionise its business in the country. “In China, consumer preferences and buying behaviour varies by area,” writes CBN. “A cosmetics firm might sell more moisturising products in the north whereas skin-whitening products sell well in the south.” That ability to offer retailers more targeted campaigns also makes the data that much more lucrative.
Not a junk proposition at all, it seems.
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