SAP's Consumer Insight 365 ingests regularly updated data
representing as many as 300 cellphone events per day for each of
the 20 million to 25 million mobile subscribers. SAP won't disclose
the carriers providing this data. It "tells you where your
consumers are coming from, because obviously the mobile operator
knows their home location," said Lori Mitchell-Keller, head of
SAP's global retail industry business unit.
There is a lot of marketer interest in that information because
it is tied to actual individuals. For the same reason, however,
there is potential for resistance from privacy advocates.
WPP units such as Kantar Media and GroupM's Mindshare have
"kicked the tires" for three years on Consumer Insight 365, testing
and helping develop applications for the service, said Nick Nyhan,
CEO of WPP's Data Alliance. The extensive time spent so far partly
reflects "high sensitivity to not doing something that would be too
close for comfort from a consumer point of view," Mr. Nyhan
The service also combines data from telcos with other
information, telling businesses whether shoppers are checking out
competitor prices on their phones or just emailing friends. It can
tell them the age ranges and genders of people who visited a store
location between 10 a.m. and noon, and link location and
demographic data with shoppers' web browsing history. Retailers
might use the information to arrange store displays to appeal to
certain customer segments at different times of the day, or to help
determine where to open new locations.
"It used to be that this data was a lot harder to come by," said
Ross Shanken, CEO of LeadID, a lead generation analytics firm. In a
previous position at data firm TargusInfo 2008 and 2010 he
nonetheless partnered with "a very large telco" to validate names,
addresses and phone numbers for data appending.
Too risky for the E.U.?
To protect privacy, SAP receives non-personally-identifiable,
anonymized information from telcos, and only provides aggregated
information to its clients to prevent reidentification of
individuals. Still, sharing and using data this way is
controversial. Nearly all the players exploring the burgeoning
Telecom Data as a Service field, or TDaaS for short, are reluctant
to provide the details of their operations, much less freely name
their clients. And despite privacy safeguards, SAP is focused on
selling its 365 product in North America and the Asia-Pacific
region because it cannot get the data it needs from telcos
representing consumers in the E.U., where data protections are
stricter than in the U.S. and elsewhere.
But the rewards may outweigh the possible tangles with
government regulators, consumer advocates and even squeamish board
The global market for telco data as a service is potentially
worth $24.1 billion this year, on its way to $79 billion in 2020,
according to estimates by 451 Research based on a survey of likely
customers. "Challenges and constraints" mean operators are scraping
just 10% of the possible market right now, though that will rise to
30% by 2020, 451 Research said.
"If I was a CEO of any telecom operator in the U.S., I would be
saying to myself I can do the same," said Michael Provenzano, CEO
and co-founder of Vistar Media, which teams up with mobile
operators to provide anonymized and aggregated data for targeting
digital out-of-home ads based on consumers' comings and goings.
"That's going to be something these guys are talking about in the
Perhaps the most prominent recent moves in the burgeoning TDaaS
realm are Verizon's $4.4 billion acquisition of AOL in May, followed by its
purchase of mobile ad network Millennial Media for $238 million in
September. Many saw the AOL buy as a means for Verizon to turn its
data into a viable business, in part because AOL provides ad-tech
infrastructure and marketer relationships that Verizon lacks.
The level of authenticated information derived from Verizon and
other mobile operators is seen as potentially more valuable than
some other consumer data because it directly connects mobile phone
interactions to individuals through actual billing information.
"We're talking about linking a household and a billing relationship
with a human being," said Seth Demsey, CTO of AOL Platforms.
Verizon's Precision Market Insights division previously stumbled
in its attempts to aggregate and package mobile data to help
marketers target consumers and measure campaigns. Sprint's similar
Pinsight Media division and AT&T's AdWorks—which segments
and targets TV audiences—have not fared much better,
according to observers.
But lackluster results from going it alone have driven telcos
toward companies that can facilitate cashing in on data. Along with
SAP on the marketer-facing side, others including HP and IBM have
stepped in to help phone carriers on the back-end data management
and analysis side.
When Spanish operator Telefonica embarked on its Dynamic
Insights offering, it partnered with consumer insights firm GfK to
help package the telco's mobile data for clients including U.K.
food purveyor Morrisons. The grocery chain used the service to
garner anonymized data connecting consumer demographic data to