With Carrier Data, Vistar Media Finds Foothold in Mobile Ad Fray

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1bCWYsGr_400x400Every time we interact, refresh our email or make a call, mobile devices run an algorithm to determine the right combination of cell towers to send the information to. Without these events, which happen thousands of times a day for frequent users, our devices could never navigate the vast expanse of the cellular infrastructure.

But these calculations leave behind a binary residue — a pool of unstructured data that carriers originally kept to improve the workings of its network. When analyzed correctly, the so-called switching data holds the key to something much more powerful: the daily movements of millions of people throughout their day.

Vistar, a digital-out-of-home startup, wants to use those data points to create a map of consumer behavior in the real world. Through a partnership with AirSage, one of a handful of small companies that have negotiated deals with carriers for this data, Vistar has developed a system which it says can allow marketers to analyze where nearly 110 million of consumers live, work and shop in an anonymized and privacy-sensitive way.

Here’s how it works. The ten year-old AirSage has worked out agreements with Sprint and Verizon to install hardware within the carrier’s firewall that collects, anonymizes and sends the switching data to its own servers in real-time. Then, the company uses the raw data, which includes information about the strength of signal coming from each server, to triangulate the approximate location of user.

By the time the data gets to Vistar, the device identifiers are anonymized and include latitude-longitudes, time stamps and a few other bits of metadata detailing the accuracy of the information. Vistar has spent the past eight months developing analytics and visualization software to turn the data stream into charts and maps that can show everything from where starbucks shoppers live to how high-earners spend their sunday afternoons.

The new data product is meant to supplement the core digital out-of-home business, Michael Provenzano, chief executive at Vistar, told me in an interview. But the move also comes as the company launches its own mobile advertising demand-side network, and looks to find a way to compete in an increasingly crowded mobile advertising industry that controls much of the spending for location media.

“We’re fighting for ad dollars against anyone who is going after mobile budgets because mobile is where all of this money for a location strategy is coming from,” said Provenzano who sold Invite Media, a desktop DSP he co-founded, to Google for $81 million in 2010. “What made online [advertising] grow fast was cookie-based behavioral targeting. What’s the equivalent of that in the real world – not the virtual one?”

Because location data derived from carrier networks is a byproduct, it offers an interesting — if not, flawed — solution to the measurement problem. The accuracy of the data can range from a few hundred meters (roughly the size of a football field) to a few thousand (the size of a few city blocks) depending on the density of the network That means tying a device to a store visit in a remotely dense area is difficult bordering on impossible.

Vistar has developed an interesting work around. By focusing on recurring places in a person’s routine, Provenzano, the company can begin to more accurately guess where the consumer lives, works or buys coffee over the course of a week or a month. Once the company can identify where the person lives (as granular as the census block) it can begin to fold in data from traditional, and more proven, providers such as Catalina or Datalogix.

To an extent, the company is making a bet on the state of the mobile advertising industry. For one, it’s betting that an interesting dataset can provide a strong enough foothold to compete in a mobile-local ad tech sector that already has a handful of extremely well-funded firms. It’s also assuming that marketers will depart from the long-standing practice of segmenting media buying by device, and begin to approach digital-out-of-home media and mobile as two-sides of a local coin.

“The data you’re using to describe your audience is the same across mobile and out-of-home,” said  Provenzano. “We got to the point where we were trying to solve a much bigger problem which was measuring the physical world.”

But the most pressing liability for Vistar and other companies using carrier data is privacy — or at least the perception of it. The major carriers have flirted with building data businesses for some time, but in the end these divisions always come second to its core subscription businesses. That means that as the market for location data expands, and companies such as AirSage expand from serving backwater industries such as transportation to a more divisive digital marketing industry, there’s no assurance that a privacy backlash might force Sprint and Verizon to scale back its efforts.

 Steven Jacobs is Street Fight’s deputy editor.