It's been clear since Verizon acquired AOL last year that the end goal was to combine the two companies' data and technology to build a massive advertising business. Verizon already made clear that it would share the data it had on user's browsing habits to improve AOL's ad targeting. Now The Wall Street Journal is reporting that a small group of AOL test customers can tap into Verizon data "about cellphone users’ locations to show if anyone went to a brand’s store after seeing an ad." AOL CEO Tim Armstrong has been out-selling clients on the idea that they should advertise with AOL so they can leverage this ability when it comes online for all clients later this year.
Sharing this kind of data on consumers might get Verizon into hot water. It was already fined $1.35 million by the FCC for its use of "supercookies." As part of its settlement with the agency, Verizon also agreed to get customers permission before sharing tracking data with outside companies, or even with sites owned by AOL. The FCC has also proposed some new rules around how much data ISPs can share with outside parties without getting a customer's permission.
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According to The WSJ report, Armstrong offered advertising clients a pitch that leaned heavily on location data. "Imagine," he said, "if a hotel chain supplied Verizon with a database of its frequent guests. That could be matched up with data on Verizon’s more than 100 million wireless customers, plus AOL’s own data, to target guests with ads for promotional offers. Later, the hotel’s sales data and the telecom giant’s customer data could be cross-referenced to see how many of those people subsequently visited the hotel."
Verizon and AOL are likely pushing the limits of acceptable advertising because they are playing catchup in the world of mobile marketing. Facebook and Google combine to control around 50 percent of the mobile ad market, and are still growing quickly. Verizon and AOL are far smaller, but may be able to grow somewhat if Yahoo is added to the package.