How telco data can improve advertising

This Industry Viewpoint was authored by Mark Lederman, Sr. Director Product Mgt, Synchronoss

Good advertising is all about knowing your customer. Companies large and small turn to various sources to help make their digital advertising and promotional efforts as effective as possible. Working with telco companies has not traditionally been one of them – until now.

Digital data being used today is most often at the macro level, largely based around spending and demographics. Useful, yes, but not very targeted. Imagine if companies realized that it’s possible to use never-before-accessible carrier data to inform advertising efforts that cost billions annually in the US.

Research shows that carrier data and analytics are not only trusted but also vast, ranging from the more basic—including how and when consumers use their phones—to a much deeper dive into websites visited, usage patterns, content interests, downloads and uploads, and more. Moving a level beyond, it’s possible to extract content from emails and text messages without breaking privacy laws by tapping into what’s contextually relevant for that user. There’s huge opportunity being missed on both sides – extremely targeted and valuable user information for the advertiser side and new revenue streams for telcos.

Context, patterns and delivery

There are three key ways that telco data can improve advertising. The first is the critical context that data can provide, identifying consumers’ interests beyond what they buy and the websites they surf. Second, user data can identify valuable usage patterns, determining when users send messages, send and receive calls, and how and when they use data.

Finally, carrier data provides relevant delivery information, revealing users’ optimal inbound ad profile, including when a prospect is most likely to be receptive to an inbound message such as an ad, offer, or educational piece, and through mechanisms like a push, SMS, email, or banner. In advertising, delivery timing and the method are as important as the offer itself.

The privacy myth

In every aspect of our industry, we all recognize the importance of privacy and the protection of user information. The risks are high for both end users and carriers and no one wants to put data at risk. But it’s a myth to think that carrier data can’t be effectively used in ways that respect privacy and are in complete compliance with laws and other legal constraints. There are techniques deployed to mine relevant data while removing or obscuring details that must remain private.

Derivation, a process of extracting context from data without sharing the data directly, is one key method. For example, from an analysis of user Chris’ activity, we can extrapolate that he likes soccer as opposed to sharing all of Chris’ texts and emails regarding FC Barcelona.

User aggregation is another method whereby data is combined across multiple users to glean information about members of the group. Anonymization, requires the removing, hashing or encrypting of personally identifiable information from data sets, so that the individuals the data describes remain anonymous.

Finally, limiting the data universe by avoiding the processing of certain data types is another means of gleaning pertinent, valuable data while not revealing privacy-protected information.

The current climate of fear surrounding privacy is understandable. But mindsets are changing. Younger generations like millennials are accustomed to handing over detailed personal information and accepting disclosures and conditions inherent in a life lived largely online. It’s simply become part of daily digital life, whether making purchases, using entertainment platforms or apps. Every time you accept a license agreement, you’re giving permission to capture and use your data to varying degrees.

The first mile to the last

Using these techniques to garner more detailed and focused user information are driving the next generation of digital advertising to a more sophisticated and highly targeted approach. But it’s only part of the story.

The first mile is the data capture, which hasn’t been highly used to this point due to a combination of challenges. Perhaps most significantly, is the sheer volume of data. The challenge is getting the data down to a manageable and usable form. With the right platform, this is no longer an insurmountable task.

The last mile is just as significant. Push notifications are widely used but mostly by app developers and gamers, not telcos themselves. Carriers are missing out on that substantial revenue. The accessibility of available data to inform those pushes allows offers to be highly targeted and based on very specific factors.

DirecTV has gleaned the benefits of addressable advertising, which uses first mile and last mile capabilities similar to that of a wireless carrier. They pull information from set top box data to understand what a viewer is watching, when, and for how long, as well as what is being recorded.

As all this data gets applied, it will drive the humanization and personalization of content and ultimately new levels of automation. Chat bots will become more humanized and interactions with customers will become more nuanced. For example, chat bots will adapt to use language that befits the audience, becoming generally more humanlike, fluid, and therefore less intrusive. Not only will this advance yield more effective communication, it will also improve the customer experience.

How other data compares

Telco data gives critical behavior, location, usage, and contextual data. There areother data sources that companies traditionally use, and different categories of data provide different types of insight. Online data firms—including viewership, marketing, and financial organizations—can provide demographics, payment, and purchase history, but their information reflects behavior derived by panels, usually limited by low overall numbers. Nielsen and ComScor, for example, are both panel-based and stand on numbers estimated well below ten million people in the US. AT&T has 100 million subscribers. That’s a lot more powerful and valuable to advertisers.

What’s next?

The digital advertising ecosystem is booming as more consumers live their daily lives, shop, and consume entertainment via mobile devices. One only has to look at the wave of large carriers pushing to purchase ad tech firms as proof of the enormous potential of monetizing carrier data. Telcos are recognizing the value of diversifying their revenue streams and providing added value to advertisers.

At the same time, services/platforms are emerging that make using telco data digestible and practical. Carriers can take advantage of data monetization through easy-to-deploy and cost-effective managed solutions. It’s a time of education for both sides of the equation. Service providers must look at their data in more profitable ways while advertisers need to recognize that carrier data is available to help meet their needs while adhering to privacy concerns and legal safeguards. A new era of advertising is upon and we all stand to gain, even consumers.

 

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Categories: Big Data · Industry Viewpoint