Privacy laws dampened consumer-data harvesting. In enterprise, it’s still the wild west

ZoomInfo is trying to layer intelligence tools on top of its vast datasets to help marketers, salespeople and HR teams find new prospects and make better decisions.

Exterior of the ZoomInfo office.

ZoomInfo employees are navigating a tricky path forward for enterprise data companies.

Photo: Scott Eisen/Bloomberg via Getty Images

Data harvesting efforts used to be the tech industry's wild west, but new regulations and laws governing that activity are popping up everywhere. That effort has created fresh guardrails around once-acceptable practices.

But there are still murky areas. Using consumer info to send targeted ads without user consent? Bad. Selling email addresses or phone numbers of business contacts? That's trickier.

ZoomInfo is powering its explosive growth on its ability to navigate that challenge, making a name for itself as a business-to-business data broker. Customers pay to access its database of information, which helps round out profiles in customer relationship management systems and other platforms with the goal of helping companies improve their sales operations.

ZoomInfo helps "companies turn those systems of record into systems of insight and ... use our data to help them do that," CEO Henry Schuck told Protocol. "We're able to collect those digital breadcrumbs that are happening outside and inside of the conversations that field sellers are having … and incorporate them in the system in a way that marketers and sellers can take advantage of them."

The company's revenue grew 57% in the most recent quarter to $174 million. ZoomInfo nearly doubled its workforce in the last year to 2,100 employees, per a spokesperson. And now, the firm is trying to build on the success to date by offering more intelligence tools on top of the datasets it owns, as well as expanding into new markets.

"What we're realizing is we can take that data and make applications that sellers are using much better. And then we are going to pick the areas where we want to actually own that application layer," said Schuck.

ZoomInfo has made several acquisitions in service of that mission. In July, the company bought conversational analytics provider Chorus.ai. Over the last year, it also purchased EverString, Insent.ai and Clickagy. And ZoomInfo recently launched a new product that helps HR teams uncover promising talent. It offers similar data as LinkedIn, along with email addresses, phone numbers and information about where an individual sits within the corporate hierarchy.

Embracing third-party data

After decades of storing customer information in CRM systems and other programs, vendors like Salesforce and HubSpot are increasingly trying to help companies make use of the data to improve their go-to-market strategies. For example, Salesforce itself is trying to infuse more AI-based tools — largely through its Einstein product — into the battle-tested services that built its empire.

But Schuck sees ZoomInfo as more of a complement to those efforts. The company says its software improves the quality of customer data, and that its automation capabilities can help alleviate the need for salespeople to manually go in and update records themselves.

"Salesforce is the core hub of activity that a company does. Salesforce is the system that talks to all of the other systems," said Schuck. "But the data and the insights about your customers have to come from both the first-party data you're collecting, as well as third-party [data] that exists that you're not collecting."

That's a big departure from how consumer-facing companies are now trying to market to end customers. Given the new privacy statutes and moves by Apple and others to limit the use of tracking software, business-to-consumer outreach is increasingly relying less on third-party information, the type that ZoomInfo specializes in.

ZoomInfo executives said privacy is a top concern for the company and argued that business information should be classified differently than consumer data, a mindset that's also reflected in some of the major privacy laws — at least, for now. There are major caveats, however.

The EU privacy law largely treats all data the same, according to legal experts, meaning user consent is required for use. Some B2B exemptions in the California Consumer Privacy Act were extended until 2023, though only direct communications between a business and a customer are covered. That would exclude information purchased from a broker like ZoomInfo, though legal experts acknowledge the space is not as clear as B2C data.

From October 2019 to June 2021, ZoomInfo spent roughly $235,000 in lobbying in California related to data broker legislation and other bills, according to public disclosures. Virginia and Colorado also exempt B2B information. The company did not hire lobbyists in those states as officials were crafting their own privacy bills but "communicated with lawmakers there about language," per an emailed statement.

Legal experts note that any sales involving individual information would likely still require user consent. ZoomInfo has a whole website accessible via the bottom of its home page that allows users to understand the scope of the information the company has assembled, as well as opt out of its collection and sales efforts. Through June 2021, ZoomInfo has also sent 126.7 million notifications to users detailing their privacy rights and offering the opportunity to opt out.

"We are setting industry standards for the ethical handling of B2B data through features that give our customers compliance assurance and control over their data," the company said in the statement to Protocol.

ZoomInfo compared its gathering efforts to someone dropping a business card on the ground while walking to work and being too lazy to go back to pick it up. But as it's grown, the applications the company sells are growing more intrusive, though perhaps not that different from other tactics used across corporate America.

Its visitor identification tool can alert a salesperson when a potential lead is on the company website, including both anonymous and known users. The level of information available, however, can vary. If an individual on a customer's website had no previous interactions with ZoomInfo, all the system can provide is an IP address that is then linked to the organization via data assets that ZoomInfo owns, per Justin Withers, the senior vice president of product strategy and marketing.

Ultimately, the strength of ZoomInfo's data — catalogs that executives believe surpass those at much larger providers such as Salesforce or HubSpot — could ultimately give the company an advantage over rivals when it comes to developing next-generation algorithms that can surface important insights for sales, marketing and HR teams.

"There's all kinds of bad data out in the market," said Withers. "Having the systems that are able to weigh different pieces of evidence and determine what is truth … is a really tricky thing. We are poised to succeed in an intelligence-driven modern go-to-market play more so than any other business because of that history."

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