Aim higher, reach further.
Get the Wall Street Journal $12 for 12 weeks. Subscribe Now

How Verizon Plans to Fix Mobile Advertising

It’s no secret that consumers are rapidly leaving their desktop and laptop devices behind, and accessing digital content through smartphones and tablets instead. But advertisers haven’t really followed.

According to data from eMarketer, U.S. adults now spend nearly 24% of their media consumption time with smartphones and tablets, but marketers only spend an average of around 10% of their ad budgets targeting those devices.

Marketers say that’s largely because of technical limitations related to targeting and measuring ads on phones and tablets. With desktop computers, online ad placements are typically targeted using small pieces of code placed on users’ machines called “cookies.” The problem is, cookies don’t work well on smartphones and tablets, and that makes it difficult for marketers to understand who their ads are reaching, and the effect they’re having on consumers.

Verizon thinks it has a way around that problem, by assigning unique identifiers to its subscribers. Through a product called PrecisionID, Verizon will pass these identifiers to advertisers when mobile users in its network load websites and apps, in order to help advertisers target messages to those users. Verizon says it doesn’t collect any information itself, and that the identifiers are anonymous.

For example, if a Verizon subscriber visits a shoe retailer’s site, the retailer might log that activity. Verizon’s PrecisionID could then help that retailer target ads to the same user’s mobile device within websites or applications.

Verizon’s Precision Market Insights division began collecting and selling data on its customers last year, WSJ reported, but that information was mostly being used for analytic purposes, such as to give stadiums and malls statistics and information about cellphone users in particular locations. The company is now shifting its focus away from analytics, and specifically towards the targeting and measurement of advertising. Verizon had 103 million subscribers in Q1, according to its earnings report.

“We went out and looked at the pain-points in the industry we might be in a position to help solve,” said Colson Hillier, vice president of Verizon’s Precision Market Insights group.

“In the mobile space delivering the right ad to right person is difficult because there is no common standard for identity and addressability. We think we’re in a position to solve that. The second piece is the measurement of mobile; there are a lot of problems with getting good attribution data,” Mr. Hillier added.

Marketers agree. Advertising agency Starcom MediaVest has already been trialing Verizon’s ad solution with clients including Kraft and 1-800-Flowers.

“Advertisers are very interested in this type of data. Consumers are heavily using mobile but it hasn’t developed much from an advertiser standpoint because it lacks a persistent identifier or a cookie. There’s no way to be precise,” said Tracey Scheppach, innovations director at Starcom MediaVest Group.

Verizon isn’t the only company hoping to capitalize on that opportunity. Facebook is now using its user data to help marketers target users across mobile apps, and online ad giant Google is evaluating non-desktop alternatives to cookies also.

Beyond just smartphones and tablets, Mr. Hillier said Verizon also plans to help marketers target its subscribers as they move across different devices. For example, if a user visits a golf site on a tablet, Verizon might help an advertiser target the same person with an ad for golf shoes on their smartphone later that day. Down the line, it could even monitor users’ TV viewing habits and serve ads to their other devices based on that information.

“We’ve started with mobile because it’s our core. But if you think of our market position across TV, broadband and wireless, it allows us to look at behaviors of individuals across different panes of glass,” Mr. Hillier said.

Verizon says users can opt out of PrecisionID, and that no personally-identifiable information is ever passed on to advertisers.

“We start with a privacy first mentality. We tread very carefully here,” Mr Hillier added.

So far Verizon has partnered with a handful of advertising technology companies to help bring its data and identification capabilities to market. Currently data management provider BlueKai, video ad company Brightroll, and demand-side platform providers Turn and RUN have integrated PrecisionID. (Verizon invested $1.5 million in RUN last year.)

Those deals aren’t exclusive, however. Verizon is exploring ways to make its data available to other partners, too.

“We’re new to this business and we recognize that commercializing and driving scale with this isn’t something were going to do ourselves. We’ve looked at how to employ PrecisionID across different parts of ad tech,” Mr. Hillier concluded.

UPDATE: A previous version of this article stated Verizon tracks and monitors its customers’ in-app and mobile web activity. Verizon says it doesn’t track or monitor users’ activity, and that it simply passes anonymous identifiers on to third-parties when they load apps and websites.

Show More Archives

Popular on WSJ