Responsible data control will be the ace up the sleeve for telcos in the digital advertising game

Mobile World Congress is where telcos showcase their strategies for the future

Mobile World Congress (MWC) 2017 is in full swing, and traditionally it has been an event where mobile operators give an insight into how they will attempt to diversify their businesses. Although in recent years interlopers – or over-the-top-players as they’re called in telco circles – have taken the limelight, but this tide is starting to shift, and talk over data privacy could help.

In my opinion the last 12 months have seen telcos get much better at articulating the value they can provide in the advertising game, not least because of the formidable Verizon Wireless is assembling within its ranks given that its purchase of Yahoo – to complement its AOL acquisition of last year – seems imminent.

It’s almost a year ago to the day that Verizon was given a rap on the knuckles by its use of ‘un-deletable super cookies’, and it has since atoned for this with the agreement to amend its consumer opt-in policy, as well as the payment of a $1.35m fine (interestingly the adtech company also embroiled in this case Turn has since been purchased by Singapore telco Singtel).

No doubt, this is a lesson that has been heeded by countless other telcos around the world, especially with the upcoming implementation of the European Union-wide General Data Protection Regulations due to take place in 2018, and telcos across the globe are using this year’s MWC to hammer that point home.

This was spelt out yesterday (February 27) when Telefonica – the Spain-based telco with over 170 million subscribers spanning Europe and Latin America – unveiled its Aura offering, a personal assistant service it claims will let its customers “control their own data”.

Looking at the main stage proceeding’s of MWC this week will also see a panel session entitled Consumer Data: Privacy and Opportunity. The official agenda description articulates how telcos “have the opportunity to play a major role in acting as the consumer’s champion”, and in my opinion is a thinly-veiled reference to the growing wariness of the public when it comes to mass surveillance of their online behavior.

Nicholas Oliver, chief executive officer of a personal data startup that Telefonica has invested in called People.io (via way of its Wayra initiative) says that given the upcoming enforcement of GDPR, personal data handling has become a business-critical issue.

We need only look at last week’s announcement that Shine Technologies would rebrand to become Rainbow in a pivot that would see it become Rainbow in cooperation with its pan-European mobile operator partner Three to act as a “guardian of the consumer experience”, as an example of this repositioning.

This involves Rainbow – which used to act as a carte blanche adblocking services to mobile operators – offering those in the in the media business access to its “insights platform”.

Advertisers and media owners can then use the service to receive “creative verification” – a seal of approval that lets them bypass Rainbow’s filter system on cellular networks. Another sign of the increasing relevance (some would argue encroachment) of mobile operators in the advertising space.

With adblocking forecast to cost the industry $12bn by 2020, such overtures definitely have to be considered, if not acted upon. It will be interesting to see if such a service will be adopted by other network operators, Rainbow certainly seems to suggest it will.

To further demonstrate the ambitions of telcos to insert themselves in the advertising game, a further session entitled Consumer Advertising and the MNO (aka telco) will take place on Thursday. Here representatives of Telefonica and Verizon-owned AOL will argue that their data assets will make them a force to be reckoned with in the advertising game, as they up their investments in the space.

Participating in this panel will be Daniel Rosen, Telefonica’s global director of advertising, who recently articulated some of his ideas on how telcos can evolve in such a way with The Drum, as well as leading personalities from cross-screen campaign specialists Drawbridge, with CEO Kamakshi Sivaramskrishnan participating, as well as mobile advertising veteran Tobin Ireland, CEO of Smartpipe.

If you ask me there's a great likelihood data privacy, and mobile operators' ability to broker the consent needed to advertise to telco subscribers is likely come up in the conversation here.

The ambition for mobile operators to get involved in the advertising game is not a new one, indeed, their ambitions of doing so date back to the early 2000's. Although internal process, and rules over issues such as net neutrality, etc, have led to disappointment.

Meanwhile, outfits such as the vast swathe of adtech outfits and most notably "the duopoly" of Google and Facebook have built billion dollar businesses – much of them built on the back of mobile advertising, something mobile advertisers currently see little benefit from.

However, given telcos' increased investment in the adtech space, plus increased clarification over data privacy rules (incidentally the recently-installed FCC chairman in the US Ajit Pai today penned a letter in favor of telcos' investment of internet access), will likely usher in a correction in the online advertising market.

And advertisers themselves seem to be taking note of the increased emphasis on consumer consent when it comes to online ads. For instance, in the closing days of 2016 The World Federation of Advertisers issued a wake-up call to the advertising industry, warning them that the upcoming GDPR rules will require a significant change from the current modus operandi when it comes to online ads.

Given that advertisers are increasingly voicing their dissatisfaction over current services Google and Facebook (who benefit from over 60% of all online ad spend) provide in return for their budgets, there's a palpable desire for change. This in addition to the implementation of stern regulation could see the tide change in the advertising industry.

Ronan Shields

I'm the digital editor at The Drum, and cover adtech and martech. Prefer news and analysis, over opinion pieces. Current fascination(s) are blockchain and media futures trading; also curious about transhumanism on a personal basis. NYC-based, but really London Irish.

All by Ronan