The Value of Data: Our POV on Verizon-AOL

May 19th, 2015 by Steve Latham Leave a reply »

I was recently interviewed by Advertising Age on the data angle of the Verizon-AOL deal (read the AdAge article).  While still fresh in my mind, I thought I’d share our POV.

First, Verizon already has unprecedented insight into what people are doing:

  • They know which device is speaking to its network and the packets and requests to each device (i.e. they capture all data sent and received)
  • They record every user session (e.g. using an app, typing an email or browsing the web)
  • Whether you’re using Verizon’s wireless service or local wifi to access the Internet, all data is captured
  • They track online behavior via cookies and relationships with 3rd parties (e.g. AOL owned Huffington Post)
  • They connect devices to each other and to desktops and households better than anyone else.
  • We believe Verizon already collects data than other providers

Acquiring AOL gives Verizon the ability to analyze the data and use it for advanced targeting of digital media.  While AOL’s sites (e.g. HuffPo) have some value, the real value is selling the ability to do advanced audience targeting to advertisers through AOL’s programmatic buying platforms for advertisers and publishers.  In short, Verizon has the diamond mines and AOL provides the mining equipment, sales and distribution.

And Verizon’s diamonds will have superior cut and clarity than what today’s competitors can offer as it can provide deeper insight to customer behavior across platforms and devices.  While competitors are trying to stitch together the pieces from the outside in, Verizon has already bolted them together from the inside out.

Not to say that AOL’s data isn’t valuable too.  In recent years AOL has done a great job of developing a very large proprietary data platform.  The Verizon deal will enhance AOL’s data in numerous ways:

  • Expand the reach of users
  • Expand the data on each user: demo, geo, behavioral, etc.
  • Enable better multi-platform / device bridging
  • Improve resolution and accuracy

So at the end of the day, this deal is about mining all that data and converting it into revenue.  As noted in the AdAge article, they will need to do this very carefully and responsibly. Verizon has a spotty record among privacy advocates so it would be smart to proceed with caution.

Thanks for your time and interest.  I look forward to your comments.

Steve Latham

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