It’s no secret Google and Facebook dominate the digital advertising arena. But maybe it’s time for a new heavyweight to emerge? Chad Wollen, Chief Marketing Officer at Smartpipe takes a look at telcos as potential contenders.
Now could be a pivotal time for new pretenders to enter the contest, with Google and Facebook both under the microscope for their data handling practices. Google faced recent criticism about location tracking, not to mention its £3.8 billion European Commission fine for competition breaches. Yet it still reported a rise in revenue in its Q2 financial results. And even the fallout from the Cambridge Analytica scandal wasn’t enough to put a dent in Facebook’s second quarter earnings.
It seems the familiarity and scale of these digital giants is still winning over both consumers and advertisers, due to the lack of obvious competition in the market.
But this may change as consumers become ever more data aware and dissatisfied with the way their personal information is treated, with regular reports of data breaches and the growth of fake news. The arrival of the General Data Protection Regulation (GDPR) is providing them with increased protection and is paving the way for a more responsible era of data use.
…the familiarity and scale of these digital giants is still winning over both consumers and advertisers, due to the lack of obvious competition in the market.
There is therefore room for a major force to challenge the duopoly. Mobile network operators (MNOs) are perfectly placed to deliver the knockout blow thanks to their secure networks and trusted consumer relationships, provided they adopt the right strategies.
Building on trusted relationships
There are four emerging models of data use – seeing it as an asset, a risk, for state control, and for inclusion. The first of these – data as an asset – is a premise the current digital giants are built on, and telcos are in a strong position to follow their lead. MNOs operate in secure networks, where they have access to high quality first-party data and, thanks to multiple touchpoints such as voice calls, SMS, downloads, and mobile commerce, can generate a detailed picture of consumption and activity.
MNOs also have trusted relationships with their customers, so consumers are more likely to share information with them and are more inclined to give them consent to data collection and processing than other types of company. Recent research reveals over 80% of consumers would allow an MNO to use their personal data for advertising purposes, provided privacy enhancing technology is in place. This is significantly more than the 50% that would opt into data collection by GDPR-compliant publishers – the most common way of monetising consumer data in the digital ad ecosystem.
Adopting ethical data strategies
Some telcos are already showing an awareness of digital advertising opportunities. AT&T recently acquired digital advertising company AppNexus to expand its advertising platform, while Singtel was an early investor in mobile ad tech, acquiring Amobee back in 2012.
Other MNOs are stressing the importance of a responsible approach to the use of customer data. Telefonica recently launched the manifesto A New Digital Deal, which has a section promoting ethical use, transparency, and choice, declaring “a human-centric approach should empower people to decide how and when their data is used.”
MNOs also have trusted relationships with their customers, so consumers are more likely to share information with them and are more inclined to give them consent to data collection and processing.
While this manifesto is a step in the right direction there is a need for an industry-wide code of data ethics. This should include minimising the amount of data used and collecting and processing only what is absolutely necessary. Telcos need to be answerable for the data practices of their partners, suppliers, and clients, ensuring responsible data use across the supply chain rather than solely looking inward at their own organisation.
Greater transparency is also required so the consumer knows exactly how their data is being used at each stage of the process, with MNOs seeing this as an ethical obligation, rather than a legal one. These measures will help maintain and strengthen relationships between telcos and their customers, crucial now the GDPR has made consumer consent a pivotal part of data exchange.
Harnessing innovative technology
Adopting a more ethical approach to data may mean employing innovative technologies that allow data to be used without identifying the individual. By leveraging temporary, single-use tokens in place of persistent identifiers, anonymised customer profiles can be made available externally for the purpose of digital advertising, while the original data remains within the safety of the network, addressing consumer concerns around the security of personal information.
By building on existing relationships with consumers, telcos can champion their cause in the new data-conscious era of digital’s evolution. Provided they recognise the need for trust and transparency and adopt privacy-enhancing technology that preserves the potential commercial advantages on offer.
The first step is to recognise questions about privacy and trust must be asked when new business opportunities are identified, so the right partners with the right solutions can be leveraged. When they do this they are perfectly placed to compete and win against the digital giants for the advertising crown