While insight into customer behavior influences mobile operators' growth and investment strategies, mobile operators and proprietors of Internet portals say there is simply not enough existing subscriber data to analyze, according to research by Nokia Siemens Networks. The big question is what tools to use, as NebuAd's troubled year underscores.
Despite a summer-long clamor by Congress and consumer groups over broadband
providers collecting information on users' Web surfing habits, mobile operators
and mobile Internet portals want more data on customers. And they not only want
more data, they want it more quickly than their current systems allow.
According to a survey
by Nokia Siemens Networks,
carriers and portals claim existing subscriber
data simply does not give them enough basis for analyzing customer behavior and
that, in turn, limits targeted advertising revenue. More than half of the survey
respondents claimed that the existing customer data infrastructure doesn't
allow enough analysis of customer behavior, while almost as many are concerned
that data is not being analyzed quickly enough.
"While Internet brands may be ahead of the game when it comes to making
use of customer data, operators have woken up to the importance of harvesting
and nurturing this data-and their lack of tools to do this properly," Rick
Halton, head of profile solution management at Nokia Siemens Networks, said in
Although the carriers and mobile site operators surveyed are sitting on
terabytes of valuable customer data, the majority of it is rendered ineffective
by fragmented databases, insufficiently quick analysis and legacy data
Due to confidentiality requirements and longer-term customer relationships,
only 4 percent of mobile operators are currently giving their customers incentives
to allow their data to be shared with third-party businesses. The comparable
figure for mobile portals was 27 percent, underscoring their greater success in
convincing mobile users to share their information.
"The findings of this study are an acknowledgement of how much work is
still needed to realize the opportunities presented by the mobile Internet.
Operators have a huge amount of data at their disposal, and the need of the
hour is to improve current methods of managing and analyzing this data to
unlock its true value in real time," Halton said.
The big question facing mobile carriers and portal operators is what tools
to use to improve their analyses. Silicon Valley
advertising startup NebuAd
ran into strong opposition in 2008
for promising a new source of revenue
for ISPs through the use of DPI (deep packet inspection), allowing ISPs to
track the behavior of Internet users without their consent in order to more
accurately target advertising.
Charter Communications, the nation's fourth-largest broadband provider,
signed up for the service, as did several other ISPs. But pressure from
Congress and consumer groups forced Charter Communications to drop its DPI
NebuAd's problems began in May when Rep. Ed Markey, the chairman of the
House Subcommittee on Telecommunications and the Internet, and Rep. Joe Barton,
the panel's ranking Republican, wrote a letter to Charter Communications
(PDF) urging the
broadband provider to drop its plans to use NebuAd's DPI package. That was
followed by a critical technical report on NebuAd's DPI process
(PDF) by Free Press and Public Knowledge.
According to the report, NebuAd uses special equipment that "monitors,
intercepts and modifies the contents of Internet packets" as consumers go
online. The report found that NebuAd inserts hidden code into users' Web
browsers that was not sent by the Web site being visited. In turn, the code
directs the browser to another site not requested or even seen by the consumer,
where more hidden code is downloaded and executed to add more tracking
Using the secretly collected information, NebuAd
serves up ads based on the user's browsing habits. NebuAd allows users to opt
out of the customized ads program but not online tracking.