How telcos can monetise data for marketing success

Despite these challenging conditions, telcos are still having to invest heavily. 5G rollout costs, for example, are expected to add up to £600 million globally between 2022 and 2025.

It’s therefore understandable that telcos are increasingly targeting new vertical sectors and looking to monetise their data. Indeed, the data monetisation market, estimated to be worth $4.17 billion in 2024, is forecast to reach $10.35 billion by 2029.

For telcos in urgent need of new revenue streams, data monetisation seems an easy win. However, they are by no means assured of success. It’s worth remembering that around 75% of telco vertical-sector plays have not achieved scale. The path to a more profitable future must be mapped carefully.

Leading telcos around the world are already making strong vertical plays in data monetisation. In Canada, for instance, EnStream, a joint venture of Canada's top mobile telecom companies, is offering companies across sectors such as banking, crypto, government, and insurance, identity verification and authentication services for various applications.

In Japan, KDDI partners with Supership, a KDDI-owned marketing solutions provider, on a next-generation digital advertising distribution platform. Using the platform, Supership’s publishers and advertising partners serve personalised messages to web and app visitors. Similarly, a major Middle Eastern telco is leveraging in-network technology to deliver addressable audiences to agencies, marketers, and publishers in the region.

Another example is Telefónica’s Tech AI of Things. This division in part focuses on leveraging IoT (Internet of Things) and AI to provide insights that help businesses personalise their marketing efforts, optimise operations, and enhance customer experiences. This includes everything from real-time data analytics to predictive modelling, helping brands anticipate customer needs and tailor their strategies accordingly.

These examples show that some telcos are already pursuing data monetisation strategies for digital services. However, the services are extremely diverse and require adherence to associated regulations to be viable.

Ultimately telcos need to decide which individual or group of data monetisation strategies to adopt when considering the creation of a new vertical. Given the extent of digital marketing and advertising challenges, this sector stands out as one of the most promising opportunities for telcos. To harness this benefit telcos must provide market-facing services that address key ecosystem challenges.

For one, telcos must get to grips with increasingly strict data protection and privacy regulations globally – laws like the GDPR (EU/UK), CCPA (US), and PDPL (Saudi Arabia). In practice, this means building their data-centric marketing services on a privacy-by-design approach, with consent baked-in from the outset.

Protecting data is also key to building consumer trust. Research suggests that more than three-quarters of consumers would abandon a brand online if they heard the organisation has been hacked. Telcos are at an advantage here as they are already trusted by consumers to securely store and manage personal data, and their network security systems are renowned worldwide as being at the pinnacle of security standards.

A second challenge is that telcos need to find people with expertise both in managing data at scale and with marketing-sector-specific processes and technologies. Telcos hoping to tap into the digital marketing space will therefore need to integrate with adtech platforms and acquire expertise from the adtech sector.

Finally, there is the need for telcos to unlock rapid value from their data monetisation strategies to prove the business case and justify further investment. Being able to draw on partners with experience of successfully deploying similar projects to other telcos can help, as these partners can provide case studies and deliver clear timelines for the realisation of value.

The good news for telcos is that there has never been a better time to make a data play in digital marketing. The sector has seen many of the data signals traditionally used to build audiences for personalised advertising dry up. This is because technologies like tracking cookies, fingerprinting, Mobile Device IDs, and user agent strings are overly invasive and out of keeping with the privacy-first internet that consumers and regulators alike increasingly demand. As a result, their use is becoming more and more restricted.

However, consumers also still demand personalised content. According to one study, 71% of consumers expect personalised experiences every time they interact with a brand, and 76% feel frustrated when they don’t receive it. Personalised advertising at scale is not going anywhere, brands and publishers simply need to find new ways of engaging with consumers.

Leveraging the huge volumes of network intelligence at their disposal, telcos can fill this addressable audience blackhole, enabling personalised advertising to continue at scale. To meet the challenges outlined above, however, any such solution must be highly secure, privacy-first and easy to integrate.

One such approach is for telcos to become identify verification service providers. Here, telcos can partner with adtech specialists to source the expertise and technology they need to deliver two types of verification IDs.

The first resolves identities on the open web and verifies users without tracking them, by matching publisher or brand IDs against network intelligence to build a consistent view of web users across sites and channels. The approach enables brands and publishers to create rich 360-user profiles by connecting visits across the open web and across the internet.

The second verification service can be used to activate addressable audiences safely and securely. Here, a dynamic ID is generated in real-time by publishers and added to the ad request for distribution through the advertising ecosystem. The telco uses its consented first-party data to verify the ID and deliver the requested audiences. The dynamic ID is valid only for a single transaction, so no data can be shared further down the value chain without user consent.

By adopting a strategic approach to telecom data monetisation and drawing on the knowledge of industry experts alongside tested technologies, operators can reduce the risks associated with entering new vertical markets and tap into new sources of revenue. By embracing service-level models for data monetisation, they can also maintain full control over new offerings, thereby enhancing consumer value while safeguarding their business interests and their customer base.

For telecom companies that excel in this area, a promising future awaits; one marked by revenue growth and a strengthened position at the core of the digital economy. Consumers, meanwhile, will benefit from a valuable service delivered by a trusted partner, helping to build subscriber loyalty.

Telcos have a range of vertical sector possibilities to choose from, but this marketing-sector play should be a priority for companies looking to target quick growth.

Tanya Fields is the COO and co-founder of Novatiq. Before co-founding Novatiq, she was director of mobile data at Telefonica where she spearheaded developments of mobile network operator consent technolo

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