Euro telcos take on Google and Meta with digital marketing platform venture
- Europe’s four largest telcos are forming a joint venture
- It will run a digital marketing platform that delivers advertising to mobile devices
- The European Commission has approved the venture’s formation
- It puts the telco-owned platform in direct competition with Google and Meta
The European Commission has approved the creation of a digital advertising platform joint venture (JV) by Deutsche Telekom, Orange, Telefónica and Vodafone Group that, the giant telcos claim, will “benefit consumers, advertisers and publishers alike”. It also puts the JV in direct competition with the so-called “big tech” companies such as Google and Meta.
The aim of the JV is to create a digital platform that will allow fixed broadband and mobile users to decide easily whether to receive marketing messages on their devices while being assured that their personal details are not being abused by advertisers and the companies that act as the intermediaries between brands and the public. There are grave concerns amongst consumers and European Commission (EC) watchdogs currently about how mobile user data is harvested and (ab)used, so anything that is user-friendly and puts consumers in control is likely to be popular.
The telco partners say the platform being developed by the JV, news of which first emerged last month, has “been designed from the outset to be compliant with European data protection policy, such as GDPR and the ePrivacy directive”, and that a successful trial has already been undertaken in Germany involving both Deutsche Telekom and Vodafone, with further trials planned for France and Spain. The trial in Germany “enabled the four operators to evaluate the platform’s ease-of-use in providing consumers with greater control and transparency over how brands communicate with them” and allowed the operators to see “how consumers’ personal data is used and their privacy protected in the online advertising ecosystem, while upholding the principles of a free internet,” they noted in the official announcement about the approval from the EC.
And customer privacy is at the heart of the proposition. “The trial platform requires affirmative opt-in consent by the consumer to activate communications from brands via publishers,” noted the venture partners. “The only data that is shared is a pseudo-anonymous digital token that cannot be reverse-engineered. Consumers are free to opt in or deny consent with a single click, as well as revoke any other consents given, either on the brand’s or publisher’s website, or via a dedicated, easily accessible privacy portal.”
The partners are also keen to point out that the platform requires specific interaction from users to make changes. “This is not a ‘supercookie’,” the partners noted in a document offering additional information on the platform. “The platform requires affirmative opt-in consent from the customers to be activated. Customers are free to opt in or also deny consent with one click. They will also be able to revoke any consents given either on the brand or publisher site or via the privacy portal. No data from participating telecoms operators – beyond the token – will be shared,” they added.
The aim of the platform is to provide “consumers a step change in the control, transparency and protection of their data, which is currently collected, distributed and stored at scale by major, non-European players,” noted the operators, in what is a very clear reference to the activities of online giants, such as Google and Meta (Facebook).
Instead, the telco partners see this as a way in which an alternative regional digital platform giant could be developed. “The solution will foster innovation in Europe, being fully interoperable across the telecoms industry and the advertising technology sectors, fostering competition and allowing European businesses to build alternative online advertising solutions in the interest of European media and consumers,” the telcos noted.
The operators, each of which will hold a 25% stake in the venture, say the resulting platform will be made available for use by “any operator within Europe”.
But even if the platform was only used by the four joint venture partners, that would provide substantial reach and scale for any advertiser using the platform, as Deutsche Telekom, Orange, Telefónica and Vodafone combined boast tens of millions of mobile and broadband customers across Europe.
The European Commission approved the creation of the JV “unconditionally”, noting in an announcement made late last Friday that the formation of the venture did not raise any competition concerns and would not “increase any risk of coordination between the four companies”.
The telco community has tried on a number of occasions to compete with the webscale giants (which are, of course, also important partners) but has usually fallen short – the datacentre, cloud services and streaming media sectors are just some prime examples. But with consumers increasingly wary of how their personal data is (ab)used by the digital services giants, the telcos might just have found a way to not only to position themselves as the ultimate trusted service provider (something that engenders customer loyalty) but may have also identified a potentially lucrative new revenue stream.
How any of that might work is yet to be revealed. With EC approval now in the bag, the telco partners say the joint venture, which will be based in Belgium and run by an independent management team “under the oversight of a shareholder-appointed supervisory board”, can now be formed and will then “outline its vision and strategy in due course, including its plans for adopting the trial technology commercially”.
- Ray Le Maistre, Editorial Director, TelecomTV
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