Location Insight Services ( LIS ) : Turning BIG data into BIG $ $

Presentation1Recent research by ( JDSU / STL ) has revealed an US$11Bn global opportunity for operators to monetize the data in their networks about places and people. The study concluded that demand for what it calls location insight services (LIS) will be driven predominantly by retailers that want to know more about local market trends and benchmark themselves against their competitors. Telcos are uniquely positioned to capitalise on LIS, as opposed to location-based services (LBS), which is proving more lucrative for over-the-top (OTT) service providers than telcos.

For some time the mobile industry has focused heavily on the opportunity presented by real time Location Based Services (LBS) for individual subscribers, a market that is estimated to reach $12.7 billion by 2014, according to Juniper Research. While there has been great success with LBS for apps targeted at consumers, many mobile operators have struggled to realize their share of this opportunity, with most of the revenue going to over-the-top (OTT) content players. OTT players lead the way in using real-time location data to provide location-centric services to consumers, such as special offers or vouchers.

By contrast, the Location Insight Services segment offers operators a new opportunity to monetize their location data. Telcos have a clear advantage over OTT players because they can aggregate huge volumes of anonymous location data over time and delivering value either directly to businesses, or via partners such as retail planners and advertising agencies. The underlying premise is that identification of repetitive patterns in location activity over time not only enables a much deeper understanding of the consumer in terms of behaviour and motivation, but also builds a clearer picture of the visitor profile of the location itself.

LIS plays to the strengths of operators because their engineers already collect anonymous location data for the purposes of analysing network performance and capacity planning.Various analysts have confirmed that there is a massive latent demand for location-centric information within the business community to enable the delivery of location-specific products and services that are context-relevant to the consumer. According to the Economist Business Unit, there is a consensus amongst marketers that location information is an important element in developing marketing strategy, even for those companies where data on customer and prospect location is not currently collected

LIS is an extension of existing software and analytics systems although data collected by these systems requires additional processing before it can be re-packaged into something marketable.This information can be shared with external systems and can be integrated with data warehouses using cost effective techniques. In many cases the intelligence can be directly used with business intelligence solutions.While commonly available cell level location enables some of the use cases, building level location intelligence from a carrier grade LIS system significantly increases the value. Examples of LIS include:

• Competitive Benchmarking (Retail) – previously unavailable intelligence on the profile of visitors to competitive stores
• Infrastructure Planning (Transport) – clear identification of “pinch points” on transport infrastructure and the precise times they occur
• Site Selection (Event planning) – evaluating previous attendee levels at a venue and attendance at competitive events with a similar audience profile
• Advertising Evaluation (Advertising/Retail) – determining the impact of advertising on store visits

For example , LIS platforms can enable mobile operators to share precise location data with transport infrastructure planners to help the understanding of where in the transport network heavy traffic occurs and when. This insight can be used to plan effective investment in infrastructure, and increase citizen satisfaction by improving transport network efficiency. LIS platforms provide the trend insight about which venues receive the best audience attendances given certain parameters, which can then be used to create a framework for predictive audience modelling. This enables event planners to more accurately assess the viability of venue locations, without needing to carry out time and resource intensive customer research.

Some Tier 1 Telcos have recognized the opportunity and publicly made noises about providing this insight. Last year Telefonica Digital unveiled a new division called Telefonica Dynamic Insights, which is tasked with monetising its vast data resources. Their first product, ‘Smart Steps’, will use fully anonymised and aggregated mobile network data to enable companies and public sector organisations to measure, compare, and understand what factors influence the number of people visiting a location at any time. These insights will help retailers tailor local offerings for existing stores and determine the best locations and most appropriate formats for new stores. A number of retailers are already helping with product development by providing user feedback. Smart Steps will also be able to help town councils measure how many more people visit their high street after the introduction of free car parking, farmers markets, or late night shopping.

Big data is one of the more fascinating developments in today’s tech world: harnessing the huge wave of information that comes out of Internet-based networks and then trying to make sense of it. Mobile operators have huge repositories of data in their businesses : not just from people’s activity on cellular networks, but from WiFi networks, too. LIS puts the power back in operators’ hands allowing them to monetise the value of their unique asset, mass location intelligence, creating new revenue streams in times where traditional business models remain under extreme pressure. Hey guys, it is time to stop complaining about OTT marauders and take action to monetise one of your network’s biggest yet most untapped asset : Location Location Location !!

Sadiq Malik ( Telco Strategist )

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