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This UK startup wants to put telcos back into the mobile ad game

telco data telco data
Photo credit:

Paul B

Smartpipe says mobile operators have got more and better customer data than Google and Facebook - and it's found a way to make it (securely) available to advertisers.

Last week saw the formal launch of UK-based Smartpipe, a startup created to sell mobile telco data to advertisers.

Anyone who’s been in the mobile business for any amount of time will smile at the name.

Why? Because ever since the OTT (over the top) players such as Apple, Google, Skype, Facebook et al turned their attention to telecoms, the incumbent mobile operators have lived in fear of a certain ignominious label.

Dumb pipe.

In other words, the telcos merely provide the ‘dumb’ connection while all these disruptive new media businesses wrest control of the customer experience, the brand equity and – most important – the incremental revenue.

So while the telco takes a flat $10 off you for your monthly data connection, it’s Spotify that charges your for music, Netflix for movies, Skype for international calling, Apple for apps.

And, of course, that $10 fee is not getting any bigger.

Over the years, the telcos have seen this dumb future coming. As a consequence, they built music services, app stores, VoIP clients, wallets. And almost without exception these services were hopeless.

Today, they have been pretty much given up on non-core services.

So the question is, do they have anything unique and valuable to contribute?

Well, many believe there’s real value in telco data and identity services.

Indeed, six years ago, the operators teamed up to explore these ideas.

The thinking was this: we have all this verifiable information on our subscribers. We know their age, gender and location – and we can even deduce certain behavioural patterns.

With user permission, this telco data could be extremely valuable to any third party (advertiser, merchant, government agency) that wants to know more about someone or to verify his or her identity.

It was a compelling proposition and, unlike the building of movie services, it didn’t take the operators into an area they knew nothing about.

But it was too early. The mobile ad business – the most obvious target for the data – was nascent and fragmented.

Two of the people involved in those early discussions were Tobin Ireland and Tanya Field, from Vodafone and Telefonica respectively.

Despite the failure of those early efforts, they recognised the power of the telco data idea. And when they discovered a startup that seemed to have the technology to make it possible to create an external data broker solution, Smartpipe was born.

Ireland says: “When we handed in our passes, we were never going to work in mobile again. But we came across this technology and we saw that it could be done. We found some kryptonite basically.”

In very simple terms, the Smartpipe tech is able to bring together the various pieces of telco data (a subscriber’s age, gender, address etc), which may be in different silos, into one set.

So, let’s say an advertiser wants to target females between 20 and 30 who live in a particular city. It will make the request to a publisher’s ‘supply side platform’ or SSP.

At the moment the bid is made, the SSP will ping Smartpipe, which will find those users in real time.

Now, the important thing is that Smartpipe does not pass along the telco data. Instead it uses a token which represents that data in a single number.

This token then finds all the profiles that match the request.

It took Ireland and Field three years to refine the core technology to work securely and efficiently inside the programmatic ad ecosystem that prevails today.

Now, they’re ready to roll out with two operators in the middle east.

Field says they chose this region because of the absence of options available to advertisers there. “If you look outside western Europe and the US, there’s a lack of data.

“In many markets they’re buying blind, so even if you’re just selling one operator, it’s a start. And it becomes easier to bring in more as the market grows.”

Though it makes sense to focus first on these underserved regions, Smartpipe believes its solution will also work in ‘mature’ markets.

“The ad industry doesn’t just want to buy data from Facebook and Google,” says Ireland.

“They want viable alternatives. After all, we all know that people aren’t always who they say they are on Facebook.”

Smartpipe is starting with mobile advertising because it’s an established market with demonstrable revenue. But the company sees plenty more opportunities to monetize telco data with any third party that needs a trusted source of identity.

“We could work with a bank that wants to validate when a customer is overseas, for example,” says Field.

“It’s slightly different from the ad play because it involves specific user consent. So in this instance, the bank would ask; can I use your location data to verify this? And the user would agree to that one piece of information being accessed.”

Expect to see the first of these services go live in Q1 next year.