AOL UK strikes O2 Weve alliance to use mobile subscriber data to take challenger status to the next level

How does an online media player get closer to offering advertisers a more accurate view of consumer behavior that Facebook and Google boast? In the case of AOL, it strikes a deal with O2’s Weve to offer hyper-targeted campaigns it claims would be too niche on the “the behemoths of search and social”.

The arrival of anonymised first-party mobile data from outside the media owner’s products is tipped to swell its stance on the post-cookie battleground where very few players have high quality, persistent ID data. And for those that do offer that sharper targeting, often “clients end up being pushed down the rabbit hole to smaller campaigns” or into walled gardens where it’s difficult for them to get the contextual insights needed to know if it’s money well spent.

Having an additional layer of data (in this case Weve) from 16 million permissioned mobile consumers on top of AOL’s own as well from advertisers, could negate both of those shortcomings, the business claimed, all the while shifting its proposition to be more focused on intent-based campaigns across titles such as The Huffington Post, Engadget, Build, Makers and the Microsoft portfolio. This happens via Weve’s ad exchange Axonix, which probabilistically models the first-party data from the telecommunications outfit before pouring into AOL’s One platform to deliver what it calls “highly accurate demographic, behavioural, and location targeting”.

Or as AOL’s commercial director for the UK Gavin Johnson explained: “A lot of critics of digital advertising have been on what someone has actioned on in the past, which is fine if a little 1.0. In terms of 2.0 we’re trying to anticipate what people might be interested in. We’re finding the more data that we put into our platform then the more we’re able to anticipate people’s potential desires a lot better.”

However, rich data is only the starting point toward better performing campaigns; clients want reach and (increasingly) something they can verify, as seen by how many times words such as “accurate targeting” and “first-party data” appear in the launch release for the alliance. This arrives a week after the world’s biggest advertiser Procter & Gamble threatened to pull ad spend from media owners if they failed to offer a transparent way of reaching personalized audiences at scale.

Johnson’s answers to both the transparency and reach questions are Nielsen and probabilistic respectively, with the former its seal of approval for those marketers concerned about targeting the right people at the right time, while the latter is all about scale. “Invariably, most of the deterministic players are either really small or really niche and for those that have the scale then they’re not particularly open,” he continued.

“These walled gardens are battling concerns of marking their own homework, which is coming to the surface following P&G’s [top marketer] Marc Pritchard’s words….Our clients are demanding scale and the only way you can do that is through probabalisitc, Pritchard is demanding a consistency across all digital advertising to make sure that everyone is playing by the same rules.”

While he has a point, many media experts regard deterministic targeting, which allows advertisers to track users across devices through personal logged-in accounts, as the silver bullet to elevating a campaign's effectiveness by precision. And yet even those closest to this level of targeting (Facebook and Google) have their own issues to overcome if they are to consign cookie-based targeting to the history books.

“What Facebook and Google have within their own construct is fabulous data and attribution, said Rob Norman, GroupM’s chief digital officer when asked about whether AOL’s alliance with Weve could help lift its challenger status to the next level.

“But what they both lack significantly is context in many cases, and what is quite clear is that AOL, and Yahoo in combination represent a large industry block, and the enrichment of that block with [mobile] subscriber data – be it in the form of Verizon data in the US, or Weve in other markets – means they are in a better place than when they couldn’t… the general rule is that the more data-enriched, and the more context, attribution it has then you have a winning hand.”

No wonder AOL’s Johnson was coy on whether his business would pursue similar deals with other telecommunications providers in the future. Theoretically, telcommunications data is just as robust as anything Facebook and Google can come up, a point Telefonica’s global director of advertising Dan Rosen stressed last year.

“We’re talking to lots of people but aren’t in a position to talk about similar partnerships but when we believe a deal is mutually beneficial and it can offer something different to our business then we can talk, all the while privacy and safety are paramount to any deal our organisation would take,” added Johnson.

On the privacy side, AOL has a team in the US working on how all parts of the business, including its alliance with Weve, will adhere to the European Union’s General Data Protection Regulation, which will introduce tougher measures on how people’s data is used to personalise advertising.

Tobin Ireland, chief executive of telco data monetisation platform, Smartpipe, which provides advertisers with pseudonymised, deterministic data, commented: “The strategic alliance between AOL UK and Weve is an encouraging step in privacy compliant telco data monetisation. The partnership is further evidence of the value placed on mobile network operator (MNO) data by the ad ecosystem, which is a rich source of first-party information that advertisers can use to precisely reach consumers.

“However, it will be interesting to see how the deal will be impacted by the upcoming General Data Protection Regulation, being brought into force on 25th May 2018. Under the GDPR, all consumer data must be pseudonymised, to make users completely unidentifiable. So called Anonymous data, on the other hand, isn’t completely de-identified — often containing details like device IDs that can be linked to individuals. It also remains to be seen how AOL UK and Weve will achieve precise targeting by utilising probabilistic data, rather than deterministic data, and at what scale."

Brand building budgets are where the business believes it can challenge its larger rivals, and the deal with Weve could help differentiate its advertising offering to the reams of marketers who are starting to question whether they have overinvested in digital.

"Today’s announcement will help propel AOL to be a real contender against the duopoly of Facebook and Google – who both have access to scaled deterministic data,” said Said Nick Welch, vice president of sales and business development for Northern Europe at ADmantX, a smart data provider for brand planning and targeting.

“To take their challenger status to the next level AOL needs to further enrich its first-party data by looking beyond demographic, behavioural, and location signals. Going a step-further and understanding user interests and intent in real time, and enabling it for advertisers, will create an even more compelling data offering to shape campaign strategies."