AT&T shuts down mobile part of AdWorks advertising network

AT&T (NYSE:T) is shuttering part of its advertising network that had allowed advertisers to deliver ads based on the behavior of AT&T's mobile subscribers. Instead, the company is focusing on tracking subscriber behavior via its U-verse TV service and other internal platforms.

In May, AT&T announced that its new AdWorks Mobile Blueprint would track its mobile users' behavior and would let advertisers to target specific types of people with mobile ads. Further, AT&T had said it would allow advertisers to combine their own customer databases with its aggregated Blueprint data "to create and reach optimal audience segments at scale on the AT&T AdWorks Mobile Audience Network."

"AdWorks does not sell customer's anonymous data--we use the data to help our advertising customers target their audience accurately," AT&T spokeswoman Mari Melguizo told FierceWireless.

The mobile effort now appears to be closed, according to a Business Insider report. The publication reported that, according to unnamed sources, most staff associated with AdWorks in New York were let go this week and that AT&T had cut or was planning to cut AdWorks employees in Los Angeles and Chicago.

Melguizo said the company's New York-based AdWorks office is not closing and that Mike Welch, who runs the AdWorks business and New York office, is staying in his position, as is Maria Mandel Dunsche, who is the unit's vice president of marketing and media innovation.

"AdWorks is refocusing on advanced TV, mobile and online advertising with our owned and operated properties, including U-verse TV, uverse.com and att.net," AT&T said in a statement to Business Insider. "We are moving away from our previous online and mobile ad networks, which represented only a small percentage of our business. As part of this realignment, we are reducing jobs that were dedicated to those previous ad networks we will no longer operate."

Melguizo further clarified that as part of the restructuring "we are moving away from the ad network re-seller model, which was a very small percentage of our overall ad revenues. We see high value for advertisers and our business with our owned and operated properties. Our TV Blueprint offering and Television Audience Network connect brands with their best potential customers at scale."

AdWorks Mobile Blueprint was part of a wider strategy at AT&T to track users' behavior, and that effort appears to still be ongoing. AT&T said during the summer it "may" begin selling anonymous information about its customers' wireless and Wi-Fi locations, U-verse usage, website browsing, mobile application usage and "other information" to other businesses. The carrier has said it will protect its customers' privacy by providing the data in aggregate so it cannot be used to identify an individual. The carrier has also said its customers can opt out of the program.

There have been several instances of consumer backlash against companies selling their customers' data. One notable example is Stopselling.me, which claims to allow users to prevent 1,430 companies from selling their personal data. The list of companies includes AT&T, Walmart, Target, Best Buy and Walgreens.

AT&T is not the first company to sell anonymous information about its customers' location and behavior. Facebook (NASDAQ:FB), Google (NASDAQ:GOOG) and most other Internet companies have long sold such data. In the wireless industry, Verizon Wireless (NYSE:VZ) launched its Precision Market Insights business last year, which also anonymizes and sells customer location and usage information. While Verizon's platform is not specifically focused on mobile, it claims its analytics tools can let advertisers "learn what mobile content your target audience is most likely to consume so you can cross-sell and up-sell more easily." Further, companies such as AirSage and SAP have recently begun selling aggregated location and usage information from wireless carriers.

Sprint (NYSE:S) has its own Pinsight Media+ targeted advertising service, which aggregates anonymous information about subscribers' location and mobile device activities and delivers targeted ads across operator-owned and third-party properties. Sprint customers must opt in to receive targeted advertising and have the choice to opt out of the data analytics program, according to Sprint spokesman John Votava.

A T-Mobile US (NYSE:TMUS) spokesperson said the carrier does not have "a business unit focused specifically on selling aggregated, de-identified customer data." However, "we may sell aggregated and anonymous information to third parties for marketing, advertising or other purposes. This aggregated information cannot be associated with specific individuals, but offers some general market trend information and fully comports with the law."

For more:
- see this Business Insider article

Related Articles:
AT&T prepping sale of customers' anonymous location information and Web, app usage data
The sale of (anonymous) wireless users' location and behavior is already big business
AT&T launches Blueprint targeted ad platform
AT&T research on tracking mobile users hints at business models for big data
Verizon's Hillier discusses data privacy and the future of mobile marketing
Report: NSA doesn't directly get access to Verizon Wireless, T-Mobile call data

Article updated with additional information from AT&T and Sprint.

Correction, Oct. 11, 2013: This article incorrectly stated who runs AT&T's AdWorks business. It is Mike Welch, not Maria Mandel Dunsche.

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