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.
During the 1980s, Britain’s monopoly gas, water, electricity and telecommunications industries were privatised and regulated. Since then, the utility industries have been on a 30-year journey, which in many ways has been a risky experiment with the critical infrastructure of the nation. The different sectors have been liberalised to a greater or lesser extent, with telecommunications the one market to have embraced competition throughout the supply chain. A lot has been learnt:
Let us hope that the collective memory of UK plc is good. As the water sector journey moves on there are many areas in which we can learn from the experiences of the telecommunications industry.
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.
Most people realise that their online activities are tracked. One clue comes from the behaviour of adverts. Having been browsing options for a new sofa, whatever page you go to next mysteriously has an ad for a sofa on it. Another clue comes from that ever-present message about cookies which has to be clicked in order for it to go away.
But few realise that their mobile device is keeping tabs on where they are. A survey published in Harvard Business Review showed that only 25% of people realised they are sharing their location when they go online.
On your iPhone go to Settings > Privacy > Location services > Frequent locations. Here you will find a series of maps pinpointing the places you have been to most often over the last few weeks.
All that happened without asking you. You can turn it off of course, if you know it is there in the first place, but it is on by default. Meanwhile Apple is adopting the role of defender of consumer privacy in its letter to consumers over its tussle with the FBI.
Location information can make apps indispensable for consumers. A simple map turns into a route planning tool when location data is added. But companies will need to ensure that consumers understand these benefits and how the information is being used – for people to choose to opt in and not out.
Andrew Keevil assists technology companies with strategy and marketing, specialising in new proposition development.