Industry
Communications, Media and Information Services
Going Beyond: CMI to Focus on Personalized Experiences for Growth
Highlights
- Privacy-enhancing technologies (PETs) like data clean rooms will revolutionize data analytics for communications service providers (CSPs).
- Decentralized solutions will create new avenues for telecom companies, helping them deliver personalized experiences without compromising privacy.
- Data clean rooms ensure trust, transparency, and compliance while unlocking new revenue streams.
Overview
Not all data is created equal.
With growing concerns over consumer protection in the ad tech world, the emergence of data clean rooms and privacy-enhancing technologies (PETs) can revolutionize data analytics for communications service providers (CSPs).
Data clean rooms are a branch of privacy-enhancing technologies where brands combine two or more PETs to achieve mutual business outcomes for ecosystem stakeholders.
These innovative technologies enable brands to engage their consumers with relevant content while respecting their privacy rights, creating a more responsible and effective advertising ecosystem for telcos.
Data hierarchy
It is essential to know what comprises first-party, second-party, and third-party data to understand how data clean rooms work.
First-party data is collected directly, both offline and online. This data comes from authenticated user consent through billing transactions, user accounts, and browsing history on websites and apps.
Second-party data refers to the transfer of first-party data from one company to another through partnership or agreement.
Third-party data, which contains a variety of data sets, including user location, online interactions, and purchase history, comes from data aggregators.
The advertising landscape has shifted in recent years, given the de-prioritizing of third-party data. The spotlight lies on decentralized solutions as the industry seeks new avenues to deliver personalized experiences without compromising privacy.
Data bank
Delivering personalized services while respecting user privacy can be challenging in the telecom industry.
Telcos rely heavily on customer data to create tailored offerings. Keeping privacy regulations and growing consumer concerns in mind, privacy-enhancing technologies are becoming increasingly popular as they allow telecom companies to utilize customer data while safeguarding personal information. While there are many kinds of PETs, these are the most prominent types:
- Tools like differential privacy enable the safeguarding of data by adding noise, mitigating the risk of re-identifying personal information
- Technologies like confidential computing, which uses secured enclaves and encryption to ensure data protection and shielding
- Techniques such as distributed ledger, federated learning, and multi-party computation which facilitate collaboration while adhering to privacy stipulations
Data clean rooms combine multiple PETs to ensure that data never leaves the native location and is not centralized, preventing misuse and leakage. Federated analytics and distributed ledger technology enable processing and data audit trail, leading to transparency and compliance.
A major challenge for the telecom industry lies in first-party data monetization. Telecom operators possess vast amounts of valuable customer data, but leveraging it requires several safeguards. This is where data clean rooms can provide a privacy-compliant framework by facilitating controlled data collaborations, enabling insights without exposing raw data.
Data clean rooms ensure compliance with privacy laws while unlocking new revenue streams. Telecom companies worldwide are becoming publishers by investing in advertising businesses, leveraging first-party data to drive ad-sales revenue. Data clean rooms ensure compliance with privacy laws while unlocking these new revenue streams.
Data, set, go
Telcos must learn to use data clean rooms to better connect with their audience.
Brands are increasingly investing in first-party data for which data clean rooms are fast emerging as the solution. Many new-age audience networks want to monetize the first-party data they own, helping advertisers secure audience engagement and data collaboration partnerships. Telecom companies can facilitate first-party data-based partnerships, inviting other brands to advertise on their channels.
Search advertising and social media controlled digital ad spending for over a decade. However, their dominance is fading due to privacy apprehensions and regulatory interventions. Third-party cookies and device identifiers are discouraged to comply with data localization requirements and ensure data privacy.
This presents an opportunity for telcos to set up alternative audience networks. The new-age audience networks can curate cohort audiences, identities, ad inventories, channels, and platforms. Brands now leverage first-party data that has authenticated user consent to attract advertisers. CSPs have two clear revenue opportunities: first-party data monetization and creating a new revenue stream through ad sales. Data clean rooms are the answer to fostering the necessary trust, transparency, and compliance.
