The sale of (anonymous) wireless users' location and behavior is already big business

Mike Dano

If you are an American and own a cell phone, your location, demographics and activities are probably already for sale to anyone with the cash to buy that data.

No, your identity is not revealed. And yes, you can opt out of the service if you want to. But you should be under no illusions: Big data is real, and wireless carriers are very clearly chasing this opportunity.

Information about mobile users' location and behavior (all anonymous) has been for sale from Verizon Wireless (NYSE:VZ) through its Precision Market Insights business for almost eight months now.

More recently, SAP announced it would sell real-time anonymous data on mobile users through its Consumer Insight 365 product. The company declined to name the operators that are supplying it with wireless customers' location data. Separately, AirSage is now selling anonymous location data from two of the three biggest U.S. wireless carriers (the company won't name the carriers). Finally, AT&T (NYSE:T) announced that its new AdWorks Mobile Blueprint tracks its mobile users' behavior and is for sale to advertisers, allowing advertisers to target specific types of people with mobile ads. Further, AT&T said it will allow advertisers to combine their own customer databases with its Blueprint data "to create and reach optimal audience segments at scale on the AT&T AdWorks Mobile Audience Network."

As the Wall Street Journal reported this week, there are plenty of willing buyers for this kind of information. The Phoenix Suns basketball team already purchased data from Verizon's Precision Market Insights to see where people are attending its games in order to better target its advertising. Similarly, Clear Channel Outdoor Holdings is testing Verizon's service, potentially to see how effective billboard advertising is. I'm assuming this means Clear Channel will be able to track the number of people who drive past a billboard and then subsequently go to the store being advertised on the billboard.

Yes, this data is anonymous. But it's still disconcerting to know that my trip to the store is now for sale to anyone who wants it.

During the recent CTIA Wireless show, I spoke with AirSage's Andrea Moe, vice president of the company's product management. She said AirSage has servers installed behind the firewall of its two carrier customers, recording the real-time location and movement details of a third of all Americans. She said that data is anonymized and then sent to out to AirSage's analytics platform, and then sold to market researchers, city planners and others. Customers can purchase data that is about an hour old, Moe said.

With this data Moe said that AirSage can, for example, tell a customer exactly how many people pass by a street corner on the first Tuesday of every month, and the average annual income of those passersby. (Moe explained that AirSage's algorithms can determine where you live by seeing where you spend your nights, and then can determine your average household income based on where you live using census data. To be clear, this is all anonymous.)

Moe said AirSage won't sell individual location data. She said every data set the company sells must have at least seven individual devices in a given area before the company will offer that information, a stipulation AirSage created by itself in order to further protect mobile users' anonymity.

Moe explained that, as wireless carriers' revenue growth slows, they're looking for ways to make money on the data they already have. And wireless carriers aren't alone: Gartner predicts that "the financial demands of storing and managing big data will lead 30 percent of businesses to directly or indirectly monetize their information assets by trading, bartering or outright selling them by 2016."

It's no secret that companies like Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB) built their businesses by selling anonymous information about their users. But big data is a dangerous business for wireless carriers to get into, since most mobile users have their phones with them at all times and because this is a new addition to an industry that is more than 20 years old.

As AirSage's Moe noted, any negative attention on the sale of anonymous mobile user data will, at the very least, stifle this market. And there is a real threat that this kind of data can make it into the wrong hands: As the New York Times recently reported, Chinese hackers have resumed their attacks on U.S. targets, including U.S. companies. Big data vendors, and wireless carriers specifically, should tread carefully. --Mike | +Mike Dano | @mikeddano

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