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How Telcos Can Balance Consumer Privacy and Targeted Ads

In this special guest feature, Charlie Thomas, SVP Insights and Analytics, at Synchronoss, points out there’s big money in big data for telecommunications companies. Mobile service providers have a host of consumer-based and behavioral information on their clients, and the market to turn that targetable data into dollars is at its highest point ever. Charlie leads the global business unit that provides cloud, messaging, analytics and automation technology from a secure cloud platform to service providers around the world. Charlie was previously CEO of Razorsight, a cloud-based advanced analytics company which Synchronoss acquired. Charlie has founded and led several startups including a broadband communications services provider that he led to an IPO valued at nearly $2 billion. He has served as a director on several boards, and presently is a director for GuidePoint Security (Inc. 500), Digital Global Systems, and Ostendio. Charlie graduated from the University of Virginia.

There’s big money in big data for telecommunications companies. Mobile service providers have a host of consumer-based and behavioral information on their clients, and the market to turn that targetable data into dollars is at its highest point ever.

Need proof? A new report from Ovum forecasts that online digital ads are queued up to be a $158.6 billion revenue generator by 2021, with mobile advertising accounting for $134.2 billion — 84 percent — of the total. The price on data may also drive up as the industry progresses. The survey, which polled more than 300 brands in the U.S., U.K. and France, revealed that six out of 10 respondents would pay more for data insights and analytics if they were supported by enhanced targeting.

This is a huge opportunity for telcos to invest in a robust, and still fairly new, revenue stream. However, these companies need to balance this profitability with their customers’ concern for privacy. This may seem tricky, but there’s a path forward.

Research suggests that Americans are willing to share their personal data if they get something in return. Consumers may be game to participate in sharing their personal data if telcos are upfront with customers about how they plan to use their data.

In Europe, where governments view data protection as a fundamental right, companies leverage consumer transparency to drive results. One example is former U.K. mobile provider Orange, who has since been bought by T-Mobile. The company provided a trial personal data app for Android phones that let users choose which types of data would be shared by Orange. The company used a proprietary irreversible anonymization tool to ensure the information could not be traced back to individuals.

One newer company collaboration squarely aimed at getting better customer data is Axonix’ acquisition of U.K. geolocation company Statiq. Axonix is Spanish carrier Telefonica’s dedicated programmatic trading platform, which the mobile provider kicked off in 2014. The company also provides a new digital assistant, a la Siri, named Aura, which helps customers decide if Telefonica should share their data with third parties. This approach hits all the all the sweet spots of blending consumer privacy with targeted ad realities — and allows customers to play hardball with social for ad dollars on Telefonica’s behalf.

While social media does represent a large amount of online interactions, many telcos capture customer information both through their network connections and, in many markets, when these companies switch hats and become internet service providers, like Verizon FiOS or AT&T U-verse. Telcos are also going the acquisition route to scale their digital media offering. It’s possible that telcos could one day out pace social platforms if advertisers thought through the richness of telco data — currently only about half of the survey respondents knew the richness of telcos’ data.

Though many people think of Google and Facebook when they think of targeted advertising, the telecom industry actually ranks second in the Ovum study to social media as the best original source for data, coming in at 67 percent of responses.

In the background of all of this is the growing telecom market itself. There were about 3.6 billion smartphone connections closing out 2016, but that number is projected to nearly double to 2021 by 2021, says Ovum. As telcos onboard these new customers, providing them with a comprehensive privacy policy with options to opt out from certain information is a sure way ahead for an industry that may soon be poised to take over social media as the best spot to place targeted ads.

 

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