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August 2013

Data Monetization: Why Selling Intelligence is a Hot New Revenue Stream for Mobile Carriers

Data Monetization: Why Selling Intelligence is a Hot New Revenue Stream for Mobile Carriers

Data monetization is a revenue dream come true for mobile carriers: a highly profitable sideshow where the carrier analyzes and sells data it already collects for other purposes.

And it’s a welcome breather in the relentless drive to boost ARPU because data monetization targets a different kind of customer: big businesses looking to advertise and exploit mobile intelligence.

The future of data monetization looks bright: as the smartphone market expands, more people will use mobile phones as their primary means to learn more about the billboard, TV ad, or print magazine ad they just saw.

Data monetization is also sweet justice: it’s a way for telcos to get in on the same game that Google, Baidu, Bing, and Yahoo have been playing so successfully on personal computers.

How big is the opportunity?  It’s too early to tell, but looking at Google’s financials gives us a hint.  Of the $44 billion in advertising revenue Google earned in 2012, a good 29% of that came through indirect partners as opposed to advertising directly on Google websites like YouTube.  So if you assume Google captures 20% of global partner advertising revenue, the entire market is worth about $60 billion today.

But the mobile phone will surely be a richer market for data monetization than the PC for three reasons:

  • A smartphone is a more personal and close-at-hand device;
  • It can track the user as she/he nears retail stores; and
  • You gain a more complete view of the user than a web search engine does.

Zettics is one of the pioneers of telecom data monetization.  Today, the firm delivers a turnkey service for several tier 1 operators, particularly in the U.S. market.  The firm’s VP of Strategic Consulting, Joe Levy, now joins us for a briefing on what data monetization is all about.

Dan Baker: To begin, Joe, please give us an overview of Zettics‘ business.

Joe Levy: Sure, Dan.  Simply put, we sell software that helps carriers monetize their data both internally and externally with third parties.  We do this by building a 360 degree view of what subscribers do when they use data services.  Carriers provide Zettics information on how their subscribers use data; what sites they browse to, what apps they use, what video/audio they stream, and use of non-traditional services like VoIP or Skype.  Carriers also feed Zettics information on device, location, and other data from the CRM system.

Zettics uses this data to drive impactful business results for the carrier, internally with marketing, customer care, and network, and externally with third parties.  All told, Zettics serves up 60 use cases that deliver positive ROI to a carrier.

If your aim is to gain a 360 degree view of a subscriber’s data behavior, you need a classification system.  What do you use?

You’re referring to our main intellectual property, a process we call Zettics Dynamic Learning.

Here’s how it works.  Carriers install our software on premise and provide us data from their internal systems that track raw URLs, IP and other requests that the mobile devices are making off the network.  Zettics maps those addresses, at high volume, to meaningful classifications using a system of data signatures.  Zettics then infers attributes for individual subscribers based on their usage.  And it’s those attributes we use to predict behaviors.

For example, if we saw a request to CarShopper.com and five other car shopping websites, we would predict that user is in the market for a new car.  In the same way, we also determine if a subscriber is a pet lover, fashionista, etc.

Why can‘t the carrier manage these classifications on their own?

Almost 20,000 new apps and countless websites are launched every month.  The availability of these new services results not just in more usage, but in new consumer behaviors, interests, and patterns of usage.  It’s a challenge mapping and categorizing those changes, but Zettics owns patented technology that automatically classifies whenever a new website, application, behavior, or pattern is detected.

Another level of categorization is by devices — whether it’s a cellphone, tablet, gaming console, or something else.  We also look at network events that could be causing a poor customer experience on that device with a particular service.  Using that data, we can help carriers identify customers who might be frustrated with their service.  And that intelligence, in turn, reduces churn and drives down care costs.

Every carrier that uses our platform gets continual updates to our data signatures as part of the on-going service we provide.  This keeps our customers on top of the latest trends and patterns as consumers use their mobile devices.

O.K., let’s get into a discussion of data monetization.  This is an extremely hot area right now with most U.S. carriers recently announcing initiatives, such as Verizon’s Precision and Sprint’s Pinsight Media+.  From your experience in the market what do you see are some of the top data monetization use cases being explored today?

Sure.  You are correct that monetization is a hot topic right now.  Monetizing data is a great way for carriers to extract more value from their fast growing data networks.  Here’s an example.

Audi creates a T.V. ad introducing its latest car model and decides to run it during the Super Bowl.  When the Audi Super Bowl ad appears, many viewers will go to Audi.com on their smartphone.  BMW might run an ad at a similar time, driving users to their website.

Well, Zettics can provide reports to the carriers on how effective Audi’s and BMW’s advertisements were.  These reports provide rich insights on subscriber behavior around the Audi and BMW brands, such as analyzing respondents across many demographic attributes, locations, device types, etc. all while adhering to the privacy policy of the carrier.

Carriers can then sell these reports to third parties including Audi, BMW, Mercedes, their Ad Agencies, and anyone else interested.  Zettics provides this as a turnkey service to the carrier.

That’s a pretty nifty service because the analytics is done for them: all the carrier has to do is reel in the customers.  Any other examples of turning around data and selling it to third parties?

Since data monetization is just taking off, new applications are emerging constantly.  Another good example is understanding what else consumers are doing online when they are not engaging with ‘your’ brand.

For example, CNN knows when you visit and interact with their service.  But when you’re not on CNN, are you playing games or reading news on another site (WSJ, USA Today, etc.)?  This information is highly valuable to CNN, their advertisers, competitors, and others.  Carriers use Zettics to sell this sort of intelligence.

I can see why carriers are getting very excited about this opportunity.  The only hurdle I see is the privacy issue.  I noticed AT&T very recently updated its global privacy policy to allow them to enter this space more aggressively.

Overall, how do you see carriers dealing with that?

Yes, the privacy aspect is critical.  We see every country and every carrier issuing privacy policies and options that are right for them.  Many will have both opt-out, and opt-in options depending on the use case for the information.  The key here is that Zettics has a complete layer we call Zettics Privacy Dial that gives a carrier control to fully comply with their privacy practice.  This includes managing opt-outs, opt-ins, and specific management of different data types.  All data is fully protected, privacy compliant, and only released according to the terms of that carrier.

Got it.  I can see why there is so much attention in this space.  Every mobile carrier in the world needs data monetization.  Thanks for your time Joe.

That’s exactly what we see as well.  Thanks Dan.

Copyright 2013 Black Swan Telecom Journal

 

About the Expert

Joe Levy

Joe Levy

Joe Levy is Vice President, Strategic Consulting at Zettics, and has a proven track record of creating deep, successful partnerships with mobile carriers.

Prior to his role at Zettics, Joe was Director, Carrier Accounts at Ontela, a provider of imaging services for mobile carriers.  Joe came to Ontela from Qpass (now Amdocs) where as Director of Marketing, Joe developed Qpass’s corporate positioning, messaging strategies and collateral materials to support sales to mobile carriers.  Previously, Joe was a senior marketing manager at Microsoft, and has also held various roles at Icarian and Accenture.  Joe holds an MBA from Northwestern University’s Kellogg School of Management and a BS in Civil Engineering from Washington University (St.  Louis).   Contact Joe via

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