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The Future of Telecom
Digital AdvertisingWhat Telecom Digital Advertisers Need to Know about First-Party Data and Targeted Advertising
November 2015
www.telogicalsystems.com/digital-solutions | For inquiries: [email protected]
3 Why First-Party Data matters in Telecom
Digital Advertising
7 Digital Advertising vs Traditional Advertising vs
Direct Database Marketing
10 Concerns about Privacy & CPNI
TABLE OF CONTENTS
EXECUTIVE SUMMARY
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First-party data use in telecom digital advertising is currently limited to media targeting, through retargeting and lookalike modeling.
While media targeting with first-party data is an improvement upon traditional advertising, first-party data is not often leveraged for creative decisioning; its use is often limited to decisioning off of broad service eligibility requirements instead.
Digital advertising increasingly resembles digital direct database marketing channels that telecom providers have long mastered. Telecom service providers are leaders in hyper-targeted micro-messaging in direct mail, email and outbound call center channels.
New platforms enable telecom providers to leverage database marketing expertise for micro-messaging to digital audiences without the limited reach and high costs of targeted media.
CPNI and consumer concerns are real, but do not present obstacles when first-party data is used correctly with proper opt-outs.
www.telogicalsystems.com/digital-solutions | For inquiries: [email protected]
Leading digital marketers across all industries have recently shifted
their focus from third-party to first-party data for digital targeting. As
reasons for the switch, most digital marketers point to the expense of
third-party data and the fact that its common availability diminishes
any competitive advantage. First party data is free, and provides a
unique competitive advantage as it is owned by the advertiser.
WHY FIRST-PARTY DATA MATTERS IN TELECOM DIGITAL ADVERTISING
What is first-party data?
First-party data is data that is gathered on your potential customers’ interaction with your brand, and actual customers’ interaction with your products.
• Purchase and usage history• Purchase date, Size, Product ID• Service usage volume• Cancellation date, Reason
• Shopping cart activity• Date, Size, Product Line, Abandonment
• Site browsing activity • Date, URL, In-page-events
• Email marketing activity• Opens, Clicks
The current primary use cases for first-party data are focused on
media targeting: lookalike modeling and retargeting. These media
targeting tactics require little more than a unique identifier, and they
enable a granularity of media targeting that has been impossible with
traditional advertising.
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www.telogicalsystems.com/digital-solutions | For inquiries: [email protected]
Targeting through media in digital advertising is an optimization of
the traditional, broadcast advertising model in which the same ad is
shown to a mass audience. A much more powerful use case that is
rapidly emerging for first-party data is creative decisioning that
targets through micro-messaging to digital audiences, not through
targeted media.
Micro-messaging builds upon database marketing science perfected
by telecom providers for direct marketing channels like direct mail
and email, where the “media” costs are less than advertising media.
By leveraging first-party audiences for digital micro-messaging in the
same way, digital advertisers are able to spend less on targeted media,
thus reducing CPM media costs while expanding reach and lifting
response rates.
Emerging platforms like those from Telogical, PaperG, Spongecell and
Anagram are bringing the micro-messaging techniques common in
direct database marketing to digital advertising. These platforms
enable creative testing of dozens of messages for multivariate
audience discovery and then targeting of the right message to the
right audience.
Until this point, use of first-party data for creative decisioning by
telecom digital advertisers has been generally limited to eligibility
requirements, as service providers generally have different network
capabilities, and different offers and promotions, in different markets.
…digital advertisers are able to spend less on
targeted media, thus reducing CPM media costs
while expanding reach and lifting response rates.“”
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www.telogicalsystems.com/digital-solutions | For inquiries: [email protected]
How do you use first-party data?(1) Lookalike Modeling: Many platforms allow marketers to
onboard customer lists, and target ads to audiences with similar
profiles. These platforms include Facebook Custom Audiences,
Google Display Network’s Similar Audiences and Twitter Tailored
Audiences.
(2) Retargeting: While basic display retargeting has been around for
a while, advanced retargeting tactics include search retargeting
using RLSA from Google and email retargeting using a vendor
such as LiveIntent or Triggermail.
(3) Creative Decisioning on Eligibility Requirements: Current use
of first-party data by telecom digital marketers is generally
limited to eligibility requirements, such as market-based offers
and network build-out.
(4) Creative Decisioning for Micro-Messaging: The first two
tactics, like third-party cookies, target through media and are
costly. While third-party cookies and lookalike modeling come at
a direct premium on top of CPM, retargeting pools typically have
high CPMs because they are cookie-rich users. Emerging
vendors, such as Telogical, PaperG, Spongecell and Anagram,
target through creative micro-messaging, which is less expensive
and doesn’t require limiting media reach to be effective.
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www.telogicalsystems.com/digital-solutions | For inquiries: [email protected]
In consumer telecommunications marketing, both wireless and
wireline digital marketers face even greater lift potential, as well as
greater challenges, than other sectors from the use of first-party data.
Service providers possess granular product purchase and usage data
that they have used for years to target traditional direct marketing –
direct mail, outbound call center and email.
The following sections will explore the potential to realize this
opportunity in telecom digital marketing, as well as the unique
challenges to use of first-party data for fine-grained targeting in
telecom.
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www.telogicalsystems.com/digital-solutions | For inquiries: [email protected]
DIGITAL vs TRADITIONAL ADVERTISING vs DIRECT MARKETINGDigital advertising is often compared favorably with traditional
broadcast advertising for its granular targeting and attribution
capabilities. However, as digital advertising becomes increasingly
addressable at scale, the more apt comparison is with traditional
direct marketing channels such as direct mail, outbound call center
and email. Telecom service providers have been leaders in advancing
these latter channels.
Statistical Modeling: Database marketing analysts use stats packages (SAS, SPSS, etc) to build one of two types of model. Cluster models combine first and third-party data to identify clusters of similar customers, and then create campaigns specific to each cluster. Predictive models assign a score to each prospect of their likelihood to respond to a campaign.
Activate Model for List Generation: Identify contacts in a list management tool to target using the statistical model for the campaign.
Run Campaign: Send direct mails or initiate outbound calls or emails to all contacts in the campaign list.
Refine Model: While in-house database marketers use response data to refine their statistical targeting models, more advanced platforms like those from Globys and Pontis enable real-time model refinements using machine learning. Globysand Pontis in particular enable personalized contact center offers based on statistical models.
How Direct Database Marketing Works
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www.telogicalsystems.com/digital-solutions | For inquiries: [email protected]
How does traditional direct marketing compare to digital marketing?
Media targeting vs creative content targeting. Digital marketing has focused on media targeting, while email, direct mail and outbound call center have sophisticated micro-messaging platforms. Direct mail copy, for example, is now sent via XML formats that include content personalization rules and are targeted towards clusters identified by in-house database marketers. Telecom product content personalization platforms like Telogical have been used for many years on contact center desktops to prompt agents with personalized product claims and messaging.
Ownership of data and models. Digital marketing does not own data or statistical models of data, while direct marketing has traditionally own and modelled data in-house. The rise of walled garden platforms in digital advertising are heightening awareness of this issue, as telecom marketers have historically invested heavily in their management and modeling of campaign data across direct marketing channels.
How can service providers combine their traditional expertise in direct marketing with the broader advertising formats available in digital advertising?
Creative Testing for Audience Discovery. New platforms like those from Telogical, PaperG, Spongecell and Anagram enable telecom digital advertisers to test several dozen, even hundreds, of creative variations concurrently. These platforms then leverage first-party data and other data sources to discover which audiences respond best to which creative messaging.
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www.telogicalsystems.com/digital-solutions | For inquiries: [email protected]
Telogical’s Creative Performance Dashboard, seen below, enables digital advertisers to monitor the overall lift from each of dozens of creative tests, while also monitoring the highest and lowest performing audiences for each creative variation.
In addition, Telogical’s platform learns a predictive model that
dynamically selects the creative that maximizes each user’s
propensity to purchase based on their user profile.
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www.telogicalsystems.com/digital-solutions | For inquiries: [email protected]
CONCERNS ABOUT PRIVACY AND CPNI
Customer Proprietary Network Information (CPNI) refers to the type,
quantity, destination, technical configuration and amount of use of the
telecommunication services subscribers purchase from a service
provider, as well as related billing information. The use of CPNI for
marketing purposes is regulated by the FCC under the authority of
Section 222(h)(1) of the Telecommunications Act of 1996.
Service providers may share CPNI among their affiliates to market
communications-related products and services. CPNI may not be
shared with unrelated third-parties for their own use.
Service providers must enable subscribers to opt-out of the use of
their CPNI for marketing of communications-related products, and all
major service providers have long included such opt-out capabilities.
This is how telecom database marketers have leveraged user profiles
to build statistical targeting models in traditional direct marketing
channels.
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www.telogicalsystems.com/digital-solutions | For inquiries: [email protected]
CONCLUSIONTelecom service providers have historically been at the cutting edge of direct database marketing practices, leveraging their deep first-party data to finely target their acquisition, upsell and retention messaging via direct mail, outbound call center and email. While digital advertisers are paying a premium for media targeting, such targeting still presumes the mass advertising model of a single creative to a mass audience.
Telecom digital advertisers are increasingly looking to build on their first-party data and database marketing expertise to target at the creative content level, not through costly media targets. This is the future of targeted digital advertising, and telecom advertisers are likely to lead the way.
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