Verizon, AT&T and Sprint have all decided to stop providing location data to third-parties. While some onlookers are declaring that “the party is over” for marketers using telco data, that’s really not the case. While this decision appears to be mostly about privacy, in the coming months, these companies can continue to help marketers—and profit massively—if they invest in the infrastructure to analyze and distribute their location data directly to marketers without any intermediary.
This isn’t the end of telco data for marketing but an evolution that proves the value of location data and insights. The most likely result of this is not that telcos abandon the data selling space, but that they keep a tighter grasp on their data and actually start developing the insights themselves, possibly with technology partners.
Here’s how the telcos can scale operations in this arena to help marketers and extract maximum value from this asset, an evolving marketing opportunity we will continue to watch.
Leverage their data
With phones needing to connect to cell towers and every smartphone having a GPS chip, the telcos are sitting on top of massively valuable insights about how their subscribers and devices move about the globe, and they’d be short-sighted to keep that information all to themselves. Many companies within and outside of the marketing space would pay a premium for access to the telco data, provided they could easily and safely import and use it.
Historically, wireless providers did not have the teams in place to make their data actionable for smaller companies in the advertising space. While they might do one-off deals with larger partners, there was no way for middle-market advertisers to tap into these valuable assets.
This is why Verizon was selling its data to LocationSmart and Zumigo. These brokers were able to ingest the data and make it usable for smaller advertisers that likely didn’t have the cachet to make partnerships directly with Verizon. These two companies reportedly sold Verizon’s data to more than 75 other companies. While Verizon certainly wants oversight over how marketers and other companies use its data, farming this service out to intermediaries means Verizon left revenue from 75 potential clients on the table in a marketing ecosystem that is adopting the use of location data at a rapid rate.
But the historic issues persist, and the telcos can’t simply turn this firehose over to anyone who wants the data. There are privacy concerns, and there’s the fact that it’s simply too much data for anyone besides the very largest global marketers to handle and make useful.
Deliver valuable consumer mobility intelligence
For marketers to tap into these insights, the telcos first need help organizing and anonymizing their location data, taking what LocationSmart and Zumigo were doing for Verizon and bringing it in-house. This would give them spinoff businesses that can offer insights to buyers of all sizes. Getting there requires technology and data scientists to help methodically organize their location data, which could spur lots of partnerships and M&A activity in the very near future. It’s not out of the question to think that AT&T, already on an ad tech acquisition spree, would have a data processing platform somewhere on its shopping list.
Fortunately, Verizon, AT&T and Sprint are not the only telcos that will go this route, either. Telcos have an unmatched understanding of how their consumers move about the world, and this is incredibly valuable to marketers, as well as researchers, urban planners, hedge funds and other data-driven businesses. There is high quantity, and because the provider is gathering it, the source is transparent. Rather than end-to-location data, we can expect wireless providers around the world to follow suit with their own in-house data businesses in the coming months.
While the movement to withhold location data sends the right signals about privacy, there has been little detail offered by these three providers on their exact location sales policies since they made their announcements in June, so a lot remains to be sorted. Yet on a high level, this is a sign that location data has matured.
The telcos, realizing that they are sitting on top of a massive asset, will now be more selective in who they partner with and take a much more active role in how their data is processed and packaged. While there is much to be decided, this should benefit marketers in the end. Data is the fuel for innovation in our modern economy, and accurate location data is incredibly valuable for understanding how populations move through the real world. The more the telcos can do to organize this information and make it easy to use and understand, the more value they’ll create for partners, marketers and the ecosystem as a whole.
