March 8th, 2011
Carriers, Ad Associations Wrestle With Mobile Ad Targeting
Ad Age
Apple knows everything you’ve ever purchased on iTunes. Foursquare knows where you tend to eat dinner on Tuesdays. And your mobile-phone carrier could be sharing aggregated information about its customers—such as age, gender, geographical area and marital status—with others.
Tucked deep inside the terms of conditions of your cellphone-service provider, you’ll find a notice similar to this one in AT&T’s privacy policy: “We may share aggregated or anonymous information in various formats with trusted non-AT&T entities,” including “retail, marketing and advertising companies that do not provide services directly for AT&T, but do offer products and services that may be of interest to you or to others.”
Data points, such as customers’ geographic location or participation in a family plan, are associated with “anonymized” identifiers such as encrypted phone numbers and device numbers and can be sent to third parties that can use that data to serve ads based on where customers live or based on their gender—say, diaper ads to moms near Chicago.
For providers, who have missed out on billions of dollars that have gone into the pockets of ad platforms, this targeted advertising presents a valuable revenue stream that’s only going to increase as mobile marketing grows. “Carriers are trying to figure out how they make money in this ecosystem,” said Krishna Subramanian, co-founder of mobile-ad exchange Mobclix. “Their bandwidth gets slammed and the platforms profit from selling ads.”
But at the same time, the industry realizes those profits can easily be imperiled by privacy concerns, which is why carriers are rushing to self-regulate before agencies such as the Federal Trade Commission and the Federal Communications Commission step in. Trade organizations including the Mobile Marketing Association, the Interactive Advertising Bureau and the Cellular Telecommunications Internet Association are all in the process of drafting self-regulation guidelines, but the problem is that the self-regulatory policies adopted for digital marketing don’t easily translate to mobile.
Read more: http://adage.com/article/digital/carriers-ad-associations-wrestle-mobile-ad-targeting/149268/