The Drum Awards for Marketing - Extended Deadline

-d -h -min -sec

Walled Gardens In-depth Data Leakage

Inside Ericsson's plans to get in on the adtech game

Author

By Ronan Shields, Digital Editor

March 13, 2017 | 7 min read

Ericsson turned heads this year at Mobile World Congress when the company, more commonly associated with telecoms network technology, lifted the lid on its plans to help telcos scale their first party data, and get in on the advertising game. The Drum sat down with an Ericsson spokesman to take a deeper dive on its proposition.

ERICSSON CIRCUIT BOARD

The staple of Ericsson's business is providing network equipment to telecoms providers / Pixaby

Accurate data at scale

The project is not the Sweden-based outfit’s first foray into the mobile advertising game, with the company formerly helping telcos monetize their own inventory in the days when operator portals were essentially the toll gate of the mobile web.

However, what the telecoms provider now plans to roll out is an ad network that will pool premium inventory where advertisers can target their desired audiences based on participating telcos’ customer data.

Essentially, this will involve Ericsson aggregating, and anonymizing telco audience data, to then make these insights available to demand-side players such as DSPs or agency trading desks.

“Basically its an Audience Management platform,” according to the Ericsson spokesman. “We will go to the market with interesting offerings towards both the supply-side and the demand-side.”

Ericsson has lineage from “the first generation of programmatic”, and it decided to re-enter the adtech sector due to its belief that it can help telcos scale their audience data, and then use those insights to generate revenue from media sales.

Deterministic data outside of the walled gardens

Advertisers often bemoan the lack of accurate data to help them with targeting consumers on their mobile devices, that is outside of the walled garden ecosystems of Facebook and Google, aka ‘the duopoly’, whose logged-in audiece data and respective device graphs the default method of doing so in the industry.

Both companies are often on the receiving end of this labeling due to the fact that those companies engaging with them are required to upload their data, with little in return. A scenario they often defend in the name of user privacy.

This is much to the chagrin of advertisers, especially as Facebook and Google had up until recently also insisted upon “marking their own homework”, although in recent months the pairing has relented slightly from their earlier stance.

Understandably, this has caused a degree of friction in the market, but with advertisers having to meet their campaign objectives, many have little choice but to accept the terms dictated to them. This has resulted in a scenario whereby $0.85 of every new dollar pouring into digital media is pocketed by “the duopoly”, according to some.

Non-conflicted

Ericsson signage

Ericsson hopes to fix this with a more open offering, one it hopes will benefit advertisers and publishers alike.

“The current adtech market is struggling because there is too much fragmentation and too many people doing the same thing. It s a well known fact that data is lacking, especially in the mobile ad ecosystem,” adds the Ericsson spokesman.

Google is again often criticized due to the fact that the decisioning of its ad server DoubleClick often biases its own inventory when used by publishers as a demand partner – Facebook faces similar criticism – with Ericsson quick to highlight that it is not a publisher or source of content itself, hence not as conflicted as the market’s big two.

“We are here to enable them (publishers) with ‘more’ data that should help them monetize their inventory better,” adds the Ericsson's spokesman. “Also, we will be providing an 'open' alternative in the market when compared to the closed systems that FB and Google provide.”

Guarantees against data leakage

Another concern that defines the current era of marketing is how data is treated, both data privacy compliance, and more recently concerns over businesses protecting their data, and insights to their customer base are on the rise.

This is popularly termed as “data leakage” and prospective participant telcos would be wary of losing out on their unique audience insight to a third-party or wore-still a direct competitor. However, the Ericsson spokesperson is quick to assure those listening that addressing these concerns is “a critical and significant piece of our solution”, adding that data security is at the very core of its offering.

“Raw data will never leave operator premises. Only aggregated and anonymized data is moved to the cloud instances,” the Ericsson spokesman states.

So just what insights can advertisers expect?

The company claims its platform will offer a significant number of insights to advertisers when it comes to audience targeting, including: demographic; interest; purchase intent (ie is someone in the market for a car or a house?); seasonal purchase behavior, and data usage. In addition, Ericsson is also anticipating a pent up demand from advertisers to use the platform for targeting “custom audiences” as well as “look-a-like modelling”.

Ericsson plans to generate revenue from the above activity using the percentage of media model, although the spokesman said the company would also experiment with a few models in the initial phase of rollout.

How close is this to being realized?

So just where is Ericsson when it comes to realizing these ambitions? The company spokesperson was unable to reveal if these new ambitions would involve the formation of a new unit within Ericsson. And with many adtech companies reportedly seeking an exit under harsh market conditions, the possibility of the Swedish giant becoming a player in the adtech consolidation narrative is not outside the realms of possibility, although Ericsson has yet to comment on any such prospect.

It has been reported that Ericsson is in the process of trialling the proposed offering with telcos in both the US and Singapore with a general roll out slated at the end of Q1 and into Q2 across South Asia as well as Latin America. Although it has yet to publcly disclose any details about its efforts with publishers.

With mobile ad spending the main reason for digital media’s growth, media spend on such devices has been forecast to hit $86.84bn by 2020, according to eMarketer. Advertisers are likely to welcome additional targeting capabilities, plus publishers will welcome any moves that will likely bolster advertising yield, as well as reduce their reliance on Facebook and Google for monetizing the mobile web.

The success of Ericsson’s ambitions in the mobile advertising space will likely rely on its ability to find its way on to mobile operators’ priority lists, as well as assuage any concerns the telcos will have over privacy concerns.

Walled Gardens In-depth Data Leakage

More from Walled Gardens

View all

Trending

Industry insights

View all
Add your own content +