Sense Networks is trying to position itself as "the big data" company of mobile. But with all the worries about privacy on what consumers regard as their most personal device, the company believes it can rely on anonymous data - such as the kind contained in apps that users opt in to - as a gateway to understanding the things in the physical world that make up users' lifestyles.
David Petersen left his post as the head of Nielsen's mobile efforts two years ago to become CEO of San Francisco-based Sense Networks. We spoke with him following the release of the company's first Mobile Advertising Pulse, a Nielsen-like overview of the marketplace that contained nuggets such as the fact that West Coast consumers had a 24 percent higher clickthrough rate on health and fitness deals than East Coast mobile users.
AdExchanger: What’s the main focus of Sense Networks?
David Petersen: We’re trying to make mobile advertising safe for display, QSR and local businesses. The original goal of the founders was to try to process location data and map the data trails that were coming off people’s phones and see what kind of behavior was embedded in that. If you looked at the location trails on my phone, you’d see that I travel to New York often, so you can surmise I’m doing business, and I’m in a lot of parks, because I have small children; you'd notice that I shop at Target, but not Wal-Mart; that I go out Fridays but not Saturdays. So we built a system that can discover these kinds of things about what people are doing via their phones, even if it doesn’t directly relate to the phone itself.
Mobile Advertising Pulse is a series of insights that we are developing over time. The background of some of the executives, including myself, includes working at Nielsen Mobile. So we are market research junkies. It’s not just spotting trends. Mobile advertising is an interesting place right now and we think we can solve some key problems that marketers, especially local retailers and quick serve restaurants are facing right now.
What are some of those key problems?
One chief problem is understanding the intersection of mobile and lifestyle. It’s knowing when people are most likely to do something and knowing when is the best time to offer them something in advance of that. That’s light years ahead of geo-fencing, when someone is moving around and a coupon hits their phone when they’re nearby. That doesn’t really work well for merchants. They want to advertise in advance. Doing it at a given moment based on a consumer’s location is generally too late to be marketing to them.
How does Sense Networks get its insights? Do you partner with other data companies?
No, it’s all in-house and it’s all exclusively within mobile. We can look at an anonymous ID and process information about it. That doesn’t require us to link to other data companies.
There’s a lot of controversy about consumer privacy these days, especially in the case of mobile. How do you manage those issues, which could potentially impact marketers you work with negatively?
This is all anonymously aggregated. That’s the important point. And even though our data is collected on an opt-in basis, we still keep it anonymous for the reasons you mention. The bottom line is that mobile activity can tell you so much about consumers’ habits and interests and lifestyles, we also don’t feel a need to connect it with other data.
In terms of tracking consumer behavior via mobile, Apple is set to release a replacement for the UDID that will avoid some of privacy issues it’s had to deal with. Apple also doesn’t accept cookies, while Google’s Android system does. How do you navigate the two? And do Apple’s changes mean anything for Sense Networks’ business?
That’s a real industry challenge and the industry needs to figure out how to treat this. From our perspective, we can use any kind of “persistence,” any kind of anonymous identifier. Whatever the solution is, it’s not important to us if it’s a cookie or not. Apps can produce their own ID that is both unique and persistent over time. Even if it doesn’t cross applications, say a user has the same app on two different devices, you can’t compare the user. But we’ve found that our app platform still produces a clear picture of what a user’s lifestyle is like.
We would benefit from the industry deciding on what is the best course. But we are not hindered by the fact that they haven’t settled on a solution.
You said Sense Networks focuses exclusively on mobile data. But don’t you feel that by not integrating outside marketing information, you’re missing a lot? After all, don’t most marketers, at this point, still regard mobile as a complement to a larger campaign that is originating elsewhere?
We do look at conversions and fulfillment, which is critical. In mobile advertising, you get paid to demonstrate that you have driven certain kinds of consumer activity. The ability to get a consumer to download something is very clear. For example, we’re very active in the daily deals space and there is a direct line to what we do and what a consumer does when accessing a deal on their phone and going into a store. That’s something that provides a great deal of intelligence, both online and offline.
Google is another example. They do a lot of business when someone does a map search and does a “quick call” to a sponsored business based on what was presented to them. Offline behavior is incredibly important for mobile and as mobile phones become part of the e-commerce solutions local businesses have, online and offline will be brought more closely together.
Imagine being able to tell an advertiser who is a “foodie” or who is into certain kinds of music or fashion. As mobile phones become more ubiquitous in people’s shopping and lifestyle choices, the kind of data we analyze also becomes increasingly important, especially to offline marketers who are increasing their digital presence as well.