Blog Post

Carriers Have a Hunch There’s Money in User Data

Wireless carriers, which have been sitting on a largely untouched goldmine of user data, may be poised to start tapping into their mother lode, according to Chris Dixon, CEO and co-founder of recommendation and personalization site Hunch. Dixon said he’s been meeting with operators that are looking at deploying Hunch to help with recommendations and personalization.

The list includes some Asian carriers but at least one major telecom in the U.S. For now, the partnership may start with recommendations for apps or ringtones. By combining Hunch’s technology with their data, the carriers can position themselves to be more useful to users and avoid the dreaded fate of becoming a commodity providing undifferentiated network access. The carriers are thinking about pushing the edge beyond recommendations to see how they can start turning their records into revenue, Dixon said.

“They don’t want to be cut out by Android (s goog) and Apple (s aapl) and become a dumb pipe,” Dixon said. “They see more and more commoditization but they have tons and tons of data. They see Hunch as a way to use that data to be more relevant in the stack.”

Hunch, if you’re not familiar, is a personalization service that takes data and answers provided by users and creates recommendations based on their information. The company recently began moving into a new phase as it looks to license its technology to retailers and websites, who are hoping to build more personal recommendations for users.

A lot of marketers are already acquiring data through scraping websites, working through information bureaus and tapping behavioral data providers like BlueKai. The carrier data is especially attractive, because it includes a lot of insight into the lives of subscribers, things like where they are, how far they travel, with whom they communicate and when they make calls and text messages. Carriers such as AT&T (s t) have been studying this data to understand the behavior of its customers as a potential new revenue source. This could be useful for a lot of companies looking to understand how to target specific audiences with certain messages.

Earlier this week, I talked to George Bell, the new CEO at mobile ad network JumpTap, and he said one of the company’s key plans for the coming year is getting access to carrier user data, to help better identify and pursue mobile users.”So little is known about the (mobile) audience and the guys with the dynamite are the carriers,” he said. “They have the personal profiles.”

Bell said JumpTap wouldn’t have to know exact user information, but could build proxies from anonymous user data allowing JumpTap to better segment and home in on a class of consumer. But that brings up one of the biggest issues around carrier data: The information is highly personal, and many consumers aren’t used to the idea of carriers sharing that data. There are lingering privacy concerns about carriers assisting the government on domestic surveillance. Web users are also learning how companies like RapLeaf are building profiles on them based on their web usage, which is unsettling for some.  Carriers will need to tread carefully, which is partly why it’s taking this long. But with the world moving toward personalization, and data becoming a prized asset among marketers, retailers and companies, it’s only a matter of time before we start seeing carriers really start tapping into their goldmine.

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Post and thumbnail photos courtesy of Flickr user RickC

7 Responses to “Carriers Have a Hunch There’s Money in User Data”

  1. Increasingly people are learning how to autonomize their web browsing. If this article is any indication, there’s no reason to expect this won’t happen in the mobile space. In the end, all the carriers will be left with is information about which proxy and VPN servers their customers are using.

    I like the comment about dumb pipes. Isn’t that what we really want are carriers to be? The first carrier that truly embraces that reality and learns to profit from it will win in the long run.

  2. Not sure how i’d feel if my carrier is selling my ultra private “communication profile information” …against “recommendations”. The emotional privacy concern about “communication” is probably much higher than the info in the social networks ( photos, etc …).

    Also, selling user’s “context” to publishers and offline businesses requires generally a free service valued enough by the subscriber ( say Google search, Foursquare mayorship,….) and a humble, low profile attitude …not to scare the end user.

    I am just not sure what is offered is “valued” enough and if Carriers have that humble attitude.

    This said, if it works, carriers may have a good way to tap into that huge “users context” market.

    So much has been tried to avoid the dumb pipe scenario…what if these networks are really dumb ?

      • Agree…the temptation is very strong…but risks are even stronger.
        I though Google’s buzz was a clear example showing how emotional privacy can be for “things we did not anticipate to be public”.
        When you log to facebook, twitter and most social network, and beyond the privacy settings…you kind of anticipate certain details (if not all) can be somewhat public.
        When you log to gmail …the info about “who send or get mails from ” was NOT intended to be public . Whether such info is important, valuable, intimate or not …is not the matter. Only matters the original intention.
        For the carrier, the same problem will come up. the info about “who i call or get calls from, where i call from to what destination, type of services used etc …” all are NOT intended to be public or transferable to third parties.

        The gain for the end user to trade that “non intended” information…needs to be extremely relevant and important …
        C.Dixon’s Hunch may surprise the subs with ultra relevant recommendations …just not sure how it balances the above privacy.