2. Collection of large volumes of historical data. Big data tools mean that we can now collect, store and use datasets large enough to reveal real behavioural insights.
3. Better analytics. Which enable more accurate prediction of future customer behaviour based on historical behaviour.
The first publicised example is a campaign by Stella Artois. Every time a targeted individual visits a bar or pub in response to a targeted mobile ad, the drinks company pays a per-visit fee to the location intelligence company, Blis. The system measures incremental footfall uplift against a baseline set by historical behaviour. As a result, the linkage between cause and effect is more visible and measurable than ever before.
The next step? Perhaps healthcare organisations might respond with messages targeted at those same individuals, advising regulars not to go to the pub as they have already visited too many times in the last month.
It first became possible to access the Internet on a mobile phone in the early 2000s, using the Wireless Applications Protocol (WAP) standard. Ever since then Mobile Network Operators (MNOs) have been seeking ways to add value to their core data service and thus avoid becoming a commodity bit-pipe provider. Early attempts to control the revenue stream involved creation of a portal (or walled garden) that would, in theory, provide all the revenue-generating services a customer might need. But digital services provision was never a core competence for MNOs – upstarts such as Google and Facebook, were much better placed. In any case, the open architecture of the Internet was always going to ensure that WAP portals went the same way as dial-up walled gardens like CompuServe (eventually bought by AOL).
But the creation, analysis and application of location data is a core competence for MNOs. Mobile networks depend critically on location information to provide the coverage and capacity needed to serve customers with data, messaging and voice services. And as 5G gets closer, faster and more sophisticated location analytics will be required to monitor network performance and assure service levels. So, there is a clear logic to Telefonica’s acquisition of location data start-up Statiq. Telefonica has the data, Statiq has the analysis capabilities, together a powerful combination.
Moves such as this give MNOs the a very real opportunity to deliver added value and counter the recent trend towards commoditisation.
Augmented Reality (AR) is finding valuable applications in business. Construction firms and estate agents are using AR to visualise planned developments, utilities are investigating the use of AR to visualise the location of underground pipes and cables. But, as is often the case nowadays, the consumer market is taking the lead. Pokémon Go has become a global AR phenomenon within months of launch, but is it just a game? A survey by the SLANT agency (here) has looked at how Pokémon Go players interact with local businesses whilst they play, with some interesting conclusions.
Businesses can place lures at their location to attract players in and it looks to be working. Slant found that 58% of players visited a business because there were lures placed there and almost half of those stayed at the business location for 30 minutes or more. The average spend of players making purchases was found to be $11.30. In the future we should expect businesses to be just as willing participants in AR games as players, especially as games providers exploit more of the available levers:
A new eBook from Esri looks at the role of location information in the IoT. The eBook predicts the emergence of an IoT data economy, a market in which data providers and aggregators participate, creating value-added data products that will power the industrial transformation that we are living through now. From innovative ways of monitoring air quality to targeted mobile advertising, a diverse range of real world applications are showing that IoT is now much more than hype. A common foundation for them all is location information, rapidly becoming a critical building block.
It has taken four years, but on 14th April 2016, the long awaited EU General Data Protection Regulation (GDPR) was adopted. This is the most far reaching piece of data protection legislation ever. It applies to companies serving customers in the EU and will impact organisations worldwide, including the UK (regardless of the referendum outcome). The ante has been upped in two major ways: 1) Much larger fines – up to 4% of turnover or 20M euros, 2) Stronger enforcement – meaning greater reputational risk.
Data that could be used to identify individuals is considered personal data, which means that location data (especially when combined with other data or unique identifiers) will be subject to much greater scrutiny. Individuals will have the right not to be subject to automated decision making (including profiling).
What does this mean for the emerging information ecosystem? We are entering a world in which data owners monetise their data assets, aggregators create data products sold via APIs, service providers deliver applications to customers built on this supply chain and location data is the glue that holds a lot of it together. We can expect the model of the online advertising ecosystem to become adopted by other industries. Companies up and down the chain will need to take a long hard look at their data products, information management processes and privacy measures.
The Open Rights Group and Krowdthink have joined forces to create a campaign designed to raise awareness amongst consumers of how the mobile operators capture and use personal location information. The call to action is to opt-out and instructions on how to do that are provided. But in doing so consumers will reduce both the personal value of their mobile device to them as individuals and the broader value to be gained from anonymised data aggregation. Benefits to consumers range from lower cost car insurance for teenagers, to the peace of mind that comes from knowing your child is safe, to the time saved avoiding traffic jams. More widely mass location analytics enable better urban and transport planning, reducing congestion, commute times and making cities more environmentally friendly.
So why encourage people to opt-out of sharing location information? The campaign highlights the risks of data falling in to the wrong hands, the use of data in marketing and the sale of data to third parties. These are issues that resonate with consumers. The Digital Catapult’s recent report ‘Trust in Personal Data’ identifies many concerns. Based on an Experian survey it shows, for example:
And of the sectors surveyed by Experian, telecoms companies were found to be the least trusted. Mobile Network Operators need to take time out from acquisition-related distractions and focus on what needs to be done to rebuild trust. The ORG and Krowdthink provide helpful starting points. Better articulation of the benefits and reasons for using location data; clearer explanations of security, how the data is used and how to opt-out will be a good start. Although complete integrity throughout the customer experience at every touch point will be needed to make a real difference, not just better contract language and collateral.
Marketing is increasingly data driven. A huge supply chain has emerged, profiling people based on their interests, behaviour and purchases and then serving up ads to them in real time through whatever device they are currently using, wherever they are. Throughout all of this, a key principle is relevance. For an ad to be relevant it is shown only to viewers of the target demographic, for whom the product is known to be of interest, at a time and in a place when they are likely to want to purchase, having opted-in… and so on. The more we think about relevance the more variables come into play. This report from Juniper research identifies some context variables for location-based advertising.
But another key marketing concept is the AIDA funnel. Marketing takes the consumer on journey from Awareness to Interest to Decision and ultimately Action. Generation of awareness is, by definition, broad brush. We cannot know all of a consumer’s preferences before she has shown any interest and she will certainly not have opted in to something she is not aware of. Whilst the digital advertising supply chain increases relevance, it does little for awareness and as ad-blocking increases the disconnect will grow. Marketers will seek better tools above the line. Traditional boundaries (for example between advertising and entertainment) will continue to blur and new disciplines (for example content marketing) will evolve, leading to consumer experiences that are increasingly hard to classify. This Yeo Valley ad gave us an early pointer. What would the TV series ‘Friends’ would have looked like if it had been invented by Starbucks?
So your phone knows where you are. But how valuable is mobile location information and what uses can it be put to? Putting aside B2B operational uses (such as mobile workforce management) for a moment, there a variety of B2C applications. Morey, Forbath and Schoop in their Harvard Business Review article identify 3 main categories of B2C data use. Location information fits into these categories well:
The benefits are distributed on a spectrum between the company and the consumer in varying amounts. For businesses the holy grail is to create apps that feature all three. The better the product, the more likely consumers are to keep using it. More individual revenue streams mean increased profitability (or faster break-even) and a more robust offering that can pivot quickly as business models change, disruptors emerge and the revenue flows take a different path.
Andrew Keevil assists technology companies with strategy and marketing, specialising in new proposition development.