A $24 Billion Secret

If you use any sort of connected device – a computer, a tablet, or a cell phone – you’re probably (hopefully, anyway) aware that someone is watching.  Maybe that’s a bit of an overstatement, but it’s accurate.  Everything you do, and everywhere you go if it’s a mobile device, is logged, along with some sort of device identifier.  It’s not hard to link a device with a person and that person with behaviors.  That’s really what the targeted advertising business is about.  

In that context, this article from Ad Age shouldn’t come as a real shock, but it’s always a little disconcerting to get a glimpse inside the factory where they make the sausage:

Under the radar, Verizon, Sprint, Telefonica and other carriers have partnered with firms including SAP, IBM, HP and AirSage to manage, package and sell various levels of data to marketers and other clients. It’s all part of a push by the world’s largest phone operators to counteract diminishing subscriber growth through new business ventures that tap into the data that showers from consumers’ mobile web surfing, text messaging and phone calls.

That’s why Verizon bought AOL and some ad tech companies, paying over $4.5 Billion for them.  Think that’s a wise investment?  Well, the global market for telco data as a service is potentially worth $24.1 billion this year, so it seems like it might be to me.  What’s less wise is that most consumers have no clue that all of this information about them – their surfing habits, their travel habits, potentially numbers they’re constantly texting, etc – are being packaged and sold without their consent.  Oh sure – when you sign the contract to use any of the carriers there is a lengthy terms of service agreement you probably clicked right through, and it contained language that said your data may be anonymized and aggregated and sold.  I’m not sure most people understand what that means in real terms.  Try getting phone service without agreeing.

Unlike most apps, which are opt-in, you really have no choice about this.  Are there benefits to the consumer?  Maybe.  In theory, you don’t see ads for things in which you have no interest, and you don’t get information about companies and services that aren’t in your area.   There is a huge downside, however, aside from the creepy factor.  Hackers can steal information that might allow them to know when your home is vacant on a daily basis, for example.  In fact, this sort of thing doesn’t go on in the E.U. countries because of the strict data protections those countries enforce.

The “tell” I see is that the phone companies don’t want to discuss this data business and the revenues they make from selling off our data.  If there wasn’t something nefarious going on, why isn’t it more out in the open?  Maybe if we all knew what was being gathered (300 cellphone events per day per subscriber by some counts), we’d be more curious?  Maybe we’d take steps, as some of us do with tracking blockers on the web, to maintain control of our own data?  What do you think?

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