The Verizon/AOL vision is starting to take shape, and it looks a whole lot like Facebook Custom Audiences.
But there’s a FCC-shaped question mark looming over the endeavor. The Federal Communications Commission passed sweeping online privacy regulations in October that will require internet service providers to obtain an affirmative opt-in consent before using a customer’s personal information, including web browsing history, app usage and geolocation.
In an email sent Sunday to some subscribers, Verizon outlined its plans to combine offline information, such as postal address, email address and device type, with AOL browser cookies, Apple and Google advertising IDs and Verizon’s proprietary unique identifier header.
Verizon wrote that its header will be inserted into web traffic sent to Verizon-owned companies, including AOL, and certain authorized partners. The identifiers will be used to serve more personalized advertising, connect app usage with web browsing activity and identify and link users across devices.
Verizon will pass what it knows about device usage patterns to AOL to power more targeted, personalized advertising.
In other words, it’s Verizon’s answer to Facebook Custom Audiences, which gives advertisers the ability to match their data against Verizon’s network of around 140 million subscribers. But there is one major difference: Verizon can provide advertisers with a wider internet play, whereas Facebook operates in a walled garden, albeit an enormous one.
“We may look back and say that this was the theme of 2016: large entities figuring out how to become the portal between the known and the unknown, between PII and non-PII,” said Alan Chapell, president of Chapell & Associates. “Players like Verizon, AT&T and others recognize that they’re just going to have to get consent for all of this stuff. But they already have Facebook Custom Audiences as the proof of concept. Marketers are already comfortable operating this way.”
But edge providers like Facebook are not subject to the same scrutiny as ISPs when the FCC’s rules are phased in over the next couple of years. (That is, if the new administration and the incoming FCC don’t make a move to scrap or modify the rules, which is a possibility.)
The FCC privacy regs, which passed by a 3-2 vote (with Republican commissioners dissenting), allow ISPs to use and share “non-sensitive” consumer information – including email addresses – through an opt-out regime, the norm for interest-based advertising. Users are automatically opted in with the right to opt out at a later point if they so choose.
The rules would seem to put Verizon in the clear as long as it provides conspicuous and persistent notice about what type of information it’s collecting. And because AOL and its data practices would normally fall under the jurisdiction of the Federal Trade Commission rather than the FCC, the new regs arguably might not apply here.
But it’s not apparent whether bringing together Verizon with AOL data, which includes browsing data, puts the combined entity under the purview of the FCC and its new privacy rules. But AOL/Verizon would have to get an opt-in if it wants to use browsing history or app usage history gleaned from the Verizon side.
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What’s for sure, though, is that Verizon and AOL need to tread lightly.
“Verizon would clearly love to commingle its customers’ browsing data with AOL’s and, ultimately, Yahoo’s to create a tracking footprint on par with Facebook and Google,” said Jason Kint, CEO of Digital Content Next. “In this case, though, they’ll need to make certain to stay on the right side of the new FCC rules put in place to grow consumer trust.”
Verizon doesn’t have the best track record when it comes to forays into the digital advertising space.
Recall the zombie cookie debacle of January 2015, when it was revealed by Stanford privacy researcher Jonathan Mayer – now the FCC’s chief technology officer – that Verizon’s unique header identifier could be used by its partners to continue tracking users if they’d taken steps to opt out.
After much unwanted attention, Verizon quickly gave users the ability to fully opt out of UIDH tracking.
In other news, Re/code reported on Thursday that AOL is laying off 5% of its staff – 500 employees – in a reorg that aims to slim down its corporate units so as to focus more of its resources on mobile, video and data.
