Wireless carrier Verizon has launched a new rewards program called ‘Verizon Up’ in which it will give away concert tickets, coffee, Apple music and Uber rides. This, according to the company is its way of saying Thank You to its customers. What customers may not realize is that under this loyalty program, Verizon rewards you for both your spending and the consent to serve your targeted ads based on your online behavior.
One credit will be earned for each $300 a customer spends on their monthly bill. The credits are then redeemable against a variety of gifts. Verizon claims this includes discounts on future hardware upgrades and “exclusive access to prime sporting events, shows, concerts and live experiences.”
Verizon rewards permission to access your life
To be eligible for the rewards program customers must be members of Verizon Select. Select is Verizon’s targeted ads program which allows the company access and permission to use your browsing history, app usage and location information. This is the catch then, customers must sign away their privacy. The cynic might say that rather than a ‘thank you’ this is a straight trade, Verizon rewards you a coffee at Starbucks in return for access to your life.
Individual web browsing, app use and location data is marketing gold. The information allows advertisers to track your spending, activities and movements and this will allow Verizon to sell targeted ads focused on and delivered to the individual subscriber. All of this will be routed through Oath, the digital media operation Verizon created from Yahoo and AOL. Fortunes have been built on this ‘big data’, notably by Google and Facebook, and Verizon wants a slice.
Old economy seeking to capitalize on revenues for targeted ads
Verizon is seeking new ways to grow its revenue and is one of many older corporate giants after a share of the new data economy. As the largest carrier in the U.S., Verizon has 114 million customers but is facing problems increasing revenues. In the last quarter it added 600,000 subscribers but at a cost, it had to sweeten the deals with discounts and contract features such as unlimited data. This presents a higher base cost to the carrier, and whilst its wireless division generated $89 billion last year this is down from the previous year. Verizon is looking at boosting its advertising revenue to plug the gap, and targeted ads offer the best bet.
6 million subscriber data made public
This is a big test for Verizon. The company faces the challenge of converting existing subscribers on to the new Verizon rewards program, and then maintaining faith in the venture into the future. In July this year, a human error at Verizon made public sensitive data from 6 million subscribers, including names, phone numbers and PIN codes. This will still be a fresh memory for many subscribers and asking them to trust Verizon with more data may be an uphill task.
Nancy Kim, a professor of Internet studies at California Western School of Law warns, “Once your data is out there, it’s out of your control”. It remains to be seen how circumspect Verizon subscribers are about their personal information. Many of them will already, knowingly or not, share much of their lives with Google and Facebook.
Wider implications for the company’s image
This is an opt-in Verizon rewards program so there is nothing to force customers to sign up, and whether they do or not may be down to how attractive they find the value exchange. Of course, this is assuming the ‘informed’ customers have read the small print, which contains much of the really important admissions and permissions.
However, the wider implication may be how much faith customers will have in Verizon’s ability to protect and respect their personal information, and whether this will impact the company’s image.
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Given just how easy it is for subscribers to switch carriers once out of contract, Verizon may not know the impact of their new attitude and usage of customers’ personal data until well into 2018. On the flipside, if this works for them we can expect to see other carriers follow suit in a more aggressive move towards personal data as a ‘digital currency’.