Carriers may hit the motherlode with customer data
The more people use mobile broadband services, the more data they generate about their interests and relationships. And, whether those customers know it or not, that data is about to start generating healthy revenue streams for mobile operators.
Two news items from recent days highlight carriers' interest and growing involvement in selling highly detailed information about their customers' broadband usage patterns and, ultimately, their daily lives.
If mobile carriers were reduced to being nothing more than dumb pipes, ″we could make a living just out of analytics," said Von McConnell, director of technology development and strategy at Sprint Nextel (NYSE:S) during this week's Broadband World Forum. McConnell, who was quoted by Total Telecom, said operators need to adopt "a more data scientific approach" to leverage all of the big data their customers are increasingly generating. ″There's a $260 billion advertising industry out there just trying to get at this data," he said.
For the most part, over-the-top players have figured out how to reach that data via the use of mechanisms such as cookies. Mobile carriers want to find a way into that cookie jar, too.
Verizon Wireless (NYSE:VZ) has indicated it knows how to do just that. CNET reports the operator this month began selling aggregated customer data to marketers showing how Verizon customers are using their mobile devices to browse the Internet and what apps they are using in particular locations. Verizon claims it could even link usage data to outside databases with information about customers' gender, age, and interests, including whether they eat out a lot or own a pet.
"Data is the new oil," said Bill Diggins, U.S. leader of Verizon's Precision Market Insights effort, last May at the Data to Dollars event sponsored by PricewaterhouseCoopers. He explained that the carrier can tell at any given time exactly which videos individual customers are watching on their handsets, whether they're on social networking sites and if they're uploading user-generated video.
Colson Hillier, Verizon's vice president of precision marketing, also spoke to our sister site FierceMobileContent earlier this month regarding the operator's inroads in mobile marketing. He said that even in the the case of aggregated and anonymous data, Verizon provides opt-out options for customers so their usage data cannot be shared.
Nonetheless, privacy advocates are riled by Verizon's marketer outreach program, claiming it potentially violates federal wiretapping law. Being a bit of a neo-Luddite, this collection of data, and what seems to be an invasion of privacy, alarms me as well. But why should it?
At this point in my life, I suspect Google (NASDAQ:GOOG) knows more about me than I know about myself. The company certainly knows more than I want it to know. And there's a valid reason why Facebook (NASDAQ:FB) plasters my home page with advertisements for cutesy t-shirts and magnets featuring adorable American Eskimo Dogs (if Duchess could read, that'd be a shout out to her). The giants of the online world are in many ways the masters of my personal digital universe.
It hardly makes sense for me, as a consumer, to suddenly be alarmed about how a mobile operator might use my personal information. After all, OTT players are making money off of operator's mobile customers, so why shouldn't the operators themselves get in on some of the data-marketing action? Indeed, any advocate for the mobile operators would argue that telecom laws which prevent mobile operators from collecting and monetizing the same types of customer data upon which OTT players profit is shortsighted and outdated.
From a business perspective, I agree 100 percent with that argument. From a consumer perspective, I wish my smartphone and the mobile network powering it weren't so smart.--Tammy
P.S. Remember to vote in the poll on the FierceBroadbandWireless home page to register your thoughts regarding the marketing of your mobile network usage data.