EE and O2 data services mean smartphones are now ‘black boxes’

Mobile operators EE and O2 are mining deeper than ever into customers’ actions and movements. By offering this data to brands they’re walking a path strewn with risks and rewards in equal measure.


Their new services to advertisers, reported by Marketing Week, will let brands see customers’ calling patterns, which sites and content they interact with, and where and when they do it – all on an anonymous and aggregated basis. It means that in different situations, whether consumers are out shopping or at a sporting event, brands can gain a greater understanding of how best to target ads to certain groups.

This effectively represents a huge shift for EE and O2 into the world of telematics, where brands use ‘black boxes’ to transmit real-time data on customers’ movements. Until now, it has been assumed that telematics’ biggest and most imminent impact will be on the car insurance industry, as insurers seek to personalise policies according to drivers’ actual behaviour.

But while data industry professionals expect in-car telematics technology to gain gradually increasing adoption over the coming year, these developments in mobile data are far more profound. They mean that most of the population could eventually end up having telematics data collected, processed and sold on a virtually constant basis – albeit unidentifiable rather than personal data. EE and O2 have effectively turned the smartphone into a black box.

Consumers have been transmitting similar data from their phones for a long time – handset manufacturers and app developers also have the ability to collect and commercialise varying levels of data, recording how consumers interact with their products. But these new mobile data services to brands herald a potential shift in the business model of mobile operators.

As organisations, mobile operators are now gearing themselves up to provide commercial analysis of real-time consumer trends. In the long run, they are turning the smartphone into the most important market research tool and themselves into pre-eminent sources of research services. Retail brands may no longer need to ask people whether they browse shopping apps while they’re walking down the high street – they’ll be able to see for themselves.

And now for the risks. Predictably, the biggest concerns will be about privacy – not because the data being sold is identifiable but because of the demand it could create for ever deeper analysis of consumers. Competing mobile operators will surely seek to enter this business area too, if they aren’t already planning it, as will hardware and software companies.

Companies’ attitudes and execution where data protection is concerned will need to be immaculate, because mobile devices are among the most personal of all possessions. They are with us almost constantly: it is what makes them such valuable data sources, obviously, but it also means that any perceived intrusion will be doubly offensive. And the deeper the analysis, the closer companies would come to knowing who someone is as a result of their movements.

If mobile tariffs come down in price thanks to this new revenue stream for operators, it might sweeten the pill for consumers. But at a time when authorities across the world are in the throes of determining what control consumers should have over their data, brands would also do well to tread cautiously on this particular road.

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