For ad industry watchers, Verizon’s recent purchase of AOL was a marriage made in heaven.
In a match that rivaled anything The Bachelor has ever offered, the phone company with massive data on consumers wed AOL with its growing ad delivery networks.
Today, startup Cinarra Systems is announcing it has landed $20 million to make consumer data from non-Verizon mobile carriers available for segmented targeting by advertisers.
In other words, CEO Alex Zinin told me, his company is like an open version of AOL that is “connecting the two industries.”
To underscore the importance of that union, the new Series B round was led by the Japan-based telecom subsidiary of conglomerate SoftBank Group. Cinarra has established a branch in Japan specifically for that market.
Founded in 2012, the Santa Clara, Calif-based company said it expects to launch its platform before summer’s end. In real time, this “carrier-oriented DSP” (demand-side platform) buys space for ads, and then, using mobile carrier data, delivers those ads.
“The carriers are sitting on a golden pile of data,” he told me, adding that the key question is “how to monetize it without violating [user] privacy.”
Zinin repeatedly emphasized that this segment-targeting places “the highest priority” on user privacy.
That means, for instance, that an ad for monogrammed coffee mugs targeted and delivered through Cinarra might be shown on the CNN mobile website for a group of anonymous users who are near a Starbucks. It wouldn’t be targeted just to Jane Smith, coffee drinker.
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He assured me the data is anonymized, will never be made directly available to the advertisers, and will never be used for individual targeting.
Zinin added that SoftBank sees this as the beginning of a new phase, when telco operators connect their data to Net platforms like online publishers and digital advertisers do. Gartner has predicted the global mobile ad market will balloon to $42 billion by 2017, four times what it was in 2012.
I asked him why telcos, which have had data on the calls we make, where we live, what services we use and so on for nearly forever, are just now getting around to using it.
After all, didn’t Verizon realize it was sitting on a goldmine of data?
Zinin replied that, while he couldn’t speak for Verizon, telcos in general have been focused over the last several years on building higher speed networks. While ad targeting to smartphones and tablets has been going through their systems, they’ve been on the sidelines.
They “were out of the game,” he said, but now they understand they’re not just telecoms “but data warehouses.”
There are many DSPs out there serving targeted ads, he acknowledged, but he contended that Cinarra is “creating a new kind of data, a new kind of campaign.”
“Most of the mobile app ads,” he noted, “are about other apps or [they are] garbage.” He added that the ads Cinarra’s platform can deliver to mobile web browsers and apps will be more relevant to the targeted group of people.
In contrast to those other DSPs, he said, Cinarra’s access to carrier data means a greater scale of data, a greater access to location-based information, and, because you’re talking about a service-level view of customers rather than an app- or browser-level view, potentially different kinds of targeting data.
In addition to more relevant ads on your smartphone, Zinin suggested that this new revenue stream will allow telcos to more readily subsidize new services to consumers.
But we’ll see about that part.
The new Series B funding, which brings the total raised by Cinarra to about $24.7 million, will be used to scale the engineering and sales teams. Besides SoftBank, other investors in this round were Almaz Capital and Siguler Guff & Company.