×

Once registered, you can:

  • - Read additional free articles each month
  • - Comment on articles and featured creative work
  • - Get our curated newsletters delivered to your inbox

By registering you agree to our privacy policy, terms & conditions and to receive occasional emails from Ad Age. You may unsubscribe at any time.

Are you a print subscriber? Activate your account.

Former Xaxis COO Invests in Telco Data Firm Zeotap

By Published on .

Mark Grether, former Xaxis COO.
Mark Grether, former Xaxis COO. Credit: Mark Grether
Most Popular

A German firm launched with the mission to turn telco data into new digital ad revenue streams just boosted its funding by 12 million euros. Founded in 2014, Zeotap entered the U.S. market recently and under-the-radar has begun fostering partnerships that are intended to bolster relationships already in place with six telcos in India, Europe and North America and other data providers.

Investors in this latest funding round include Here, a German auto-industry-backed map and location data firm, as well as angel investors such as Mark Grether, former COO of Xaxis and former T-Mobile strategy exec Seth Schuler.

"What I saw was that there is a tremendous opportunity for the telco providers in becoming big rivals to the Googles and Facebooks," said Mr. Grether. "If there is room for someone else, that's definitely the Verizons and the AT&Ts," he added. "They have data on all of what we do online via our mobile devices."

Zeotap links telco data to mobile ad targeting systems, and is among the few firms dedicated to helping telcos transform their data into new revenue via advertiser dollars. As the growth of new mobile subscribers dwindles, telcos have become increasingly interested in creating new revenue streams generated from the information they have about current customers, including data on home addresses, demographics and the locations where subscribers' phones are spotted. Much of this data, particularly the mobile location data, was considered useless "data exhaust" until the past few years when enterprising data speculators entered the fray to help telcos profit from it.

"Our ecosystem is growing tremendously and therefore, yes indeed, there is so much money to be made," said Mr. Grether, who left Xaxis last year and declined to share information about his current employment. This is the first time he has invested in Zeotap, which he believes has a future outside the world of telco data. For example, he suggested that the funding from Here, which provides map data for automated vehicles and offers a navigation app for consumers, could eventually supply data to Zeotap for ad purposes.

Zeotap has raised a total of around $20 million thus far, and has formed deals with four non-telco data firms supplying additional location, interest and purchase intent data. The company said it will use the $12 million euro infusion to expand its data on-boarding, data monetization and marketing teams in Berlin, New York, Madrid and Milan, and add engineers and data scientists in Bangalore. Last year Zeotap hired a general manager for North America to help woo the ad industry here.

Advertisers including Mercedes-Benz have worked with Zeotap to target mobile ads to consumers based on data the company gleans from its telco partners. Zenith España, which works on Mercedes' media duties in Spain, wanted to aim its ads for the Mercedes-Benz E-Class at people who could afford the pricey sedan. Zeotap built clusters of consumers based on the amount of their mobile data and voice services bills each month.

Zeotap ingests anonymized, non-personally-identifiable network data through feeds from its tier-1 carrier partners and uses it to target mobile ads to segments of those consumers through its own platform and those of ad tech partners. While some equate mobile data with real-time location data, Zeotap isn't currently working in that arena. Instead, it focuses on other telco information that categorizes consumers according to factors such as income proxies and the types of contracts they have. The startup will not name any of its telco partners, highlighting the sensitivity around a business model that depends on telcos sharing customer information.

Not only is it historically difficult to convince telcos to share this information, data privacy and security concerns have been significant obstacles to monetization of telco data. Zeotap employs multiple methods to anonymize or strip telco data of personally identifiable information. The company has consulted with privacy lawyers and others in developing its technology and business model, and last year underwent a self-imposed hack of its system to ensure data leakage is prevented. Zeotap said it has been certified for the new EU General Data Protection Regulation, which will take effect in May 2018.

"That's why they were so successful at onboarding the telcos," said Mr. Grether, regarding Zeotap, "because they have a compelling story on how to protect privacy because that's of the utmost importance to the telcos."