Dr. Richard Benjamins Director Business Intelligence Telefonica Digital Big Data – From hype to reality Telefonica Digital © 2013

2 Telefonica Digital The hype remains

3 Telefonica Digital is getting more and more crowded

4 Telefonica Digital “Data-driven” pays off, but it is hard to get there

5 Telefonica Digital Privacy remains an issue

6 Telefonica Digital PI EconomyBig Data for other businessBig Data to optimise your business How can businesses play in the Big Data space? Different “business” models with different maturities and different risks Leverage data to understand and improve business (x/up sell, churn) and products Data = improved business Recognize that digital data is delicate (privacy) Turn that into an opportunity Data = risk = business Insights that help improve businesses and governments Data = business Leverage data for targeting users with relevant ads and higher CTR and conversion Data = better advertising Telefonica Dynamic Insights Smart cities Improve services Advertising Access to insights Become a gatekeeper of personal data

7 Telefonica Digital Big Data to optimise Telefonica Digital’s business Traditionally, insights from data are generated in a fragmented way across the organisation, limiting the quality of decisions There is an “easy” opportunity to create a more integrated view of customers, products and markets, leveraging Open Data as well Analyst reports Macro KPIs, markets Social media DWH Campaigns & Sentiment analysis Business KPIs Network data Network KPIs Strategy dept. Marketing dept. BI dept. Network dept. Report 1Report 2Report 3Report 4 From a fragmented view on markets and products Open Data Analyst reports Social media DWH Network data Big Data Platform One consolidated view To an integrated view based on internal data of P&S, social media, network data, analyst data and Open Data

8 Telefonica Digital Deliver Big Data in your organisation – become data-driven

9 Telefonica Digital....made better Big decisions….. 1st product – “Smart Steps” for Retailers: Decide on store location Understanding store performance vs footfall Plan local marketing campaigns and track their impact Optimise resource planning – staffing/open hours Smart steps, for retailers

10 Telefonica Digital Retailers have questions... I know the activity that goes on inside my stores. But what % of my target market is walking past outside? What is the opportunity that I am missing? I am a large supermarket owner and one of my competitors has opened up down the road. I need to identify our battleground. Where is my competitor strongest and weakest? Where should I locate my new store? Where should I target loyalty or acquisition marketing campaigns? Where are my customers coming from? I need to manage my resources. When are my peak times? Could I be operationally more effective if I changed my opening times? Strategic Decisions Performance Management Retailers worry about …

11 Telefonica Digital Smart steps Telefonica Dynamic Insights Gfk Mobile Behavioural Patterns Consumer Data Assets Smart Steps

12 Telefonica Digital 39 % 39 2G Network 3G Network 900 MHz 1800 MHz 2100 MHz G Network NETWORK DATA The o2 mobile network has hundreds of cells to measure the trends in footfall across the country

13 Telefonica Digital PRIVACY ANONYMISATION Before Telefonica Dynamic Insights (TDI) receives the data, all personal information is removed. The data TDI receives are cryptographically hashed values AGGREGATION The hashed values are aggregated into groups, i.e. gender & age band. At this stage there are only crowds of o2 customers EXTRAPOLATION We take our sample and extrapolate to population totals, using mathematical algorithms. This gives us the grouped values Smart Steps uses. A 3 step process

14 Telefonica Digital 39 % 39 Easier to use Further protecting anonymity Extrapolated to represent local population 200 x 200 GRID Footfall is rendered into 200 x 200 metre grid squares across the country

15 Telefonica Digital Example question of a marketer COUNT What are the profiles of the people in the area of my store? How does the footfall in our area change throughout the day?

16 Telefonica Digital Differential aspect Export data and combine with other sources Today’s data tomorrow. Fastest data delivery in the market Insights 24/7/365. Data every hour, day, week and month. You choose. Intuitive web tool covering the whole of the UK to draw insights from Eliminates retailers’ blind spots. The profile of the footfall in their area Vast sample base based on observed crowd behaviour