White PaperIBM Software Telecommunications

Creating smarter campaigns with the IBM Advanced Analytics platform

2 Creating smarter campaigns with the IBM Advanced Analytics platform

Communications service providers (CSPs) have much to gain from deploying big data analytics capabilities that enable smarter campaigns. Smarter campaigns use big data analytics to improve marketing promotion results, increase revenue and reduce customer churn. Major CSPs such as Verizon and AT&T already offer wireless subscribers mobile promotions from participating advertisers that focus on an individual’s location, interests, usage patterns and additional data to create highly targeted offers. Other CSPs, such as XO Communications and Ufone, are leveraging big data to reduce customer churn and provide subscribers with new offers.

This white paper provides details on the specific benefits that XO and Ufone achieved from their big data implementations, and presents an overview of the types of data and technologies CSPs will need to deploy mobile couponing promotions to their wireless subscribers.

Reducing customer churn with big dataBig data analytics can be used to reduce customer churn and increase subscriber revenue for new products and services. XO Communications deployed big data analytics solutions from IBM to reduce churn and retain subscriber revenues for its midsized enterprise customers. Ufone implemented IBM solutions to reduce prepaid customer churn and improve campaign response rates.

• XO Communications is a US-based national communications service provider of VoIP, voice, network, carrier, wholesale and hosted services. XO serves businesses, government, domestic and international telecommunications carriers, cable companies, content providers and mobile wireless companies. Large XO customers deemed at risk and likely to churn were already receiving regular outreach from client services managers to prevent defection, but the number of at-risk midsized customers was too high for XO to cost-effectively manage in the same way. The company wanted to use analytics software to better predict midsize customer behavior, so it could proactively reach out to those customers with the highest potential to churn. With the IBM Advanced Analytics platform, XO increased customer retention, retained subscription revenues and realized a payback on its investment in five months.

• Ufone, the brand name of Pak Telecom Mobile Limited, is a Pakistan-based mobile services provider that is one of the largest wireless carriers in Pakistan. With more than 24 million subscribers, Ufone was looking for ways to reduce its high churn rate of 3 percent per month. The company wanted a more precise way to provide customers with targeted offers to help reduce churn and increase customer loyalty and revenue. By using the IBM Advanced Analytics platform, Ufone expects to reduce churn by 15 to 20 percent, improve campaign response rates from 25 to 50 percent, and analyze call detail records within 30 seconds versus a day or longer with prior systems.

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The IBM Advanced Analytics platform enables CSPs to analyze subscribers’ usage profiles, billing records and past responses to offers in seconds. This intelligence can then be used to precisely identify at-risk subscribers who need immediate attention or create targeted promotions that are more likely to be accepted. In addition to developing campaigns to retain current subscribers and increase customer satisfaction with their own products and services, CSPs can also use IBM Advanced Analytics technologies to offer opt-in subscribers valuable new mobile coupons from third parties. The IBM Advanced Analytics platform, based on the IBM Big Data and Analytics portfolio, provides a complete set of solutions for CSPs that want to deliver smarter campaigns (including mobile couponing) and other big data analytics capabilities.

Delivering mobile coupon campaigns with the IBM Advanced Analytics platformDelivering mobile coupons and other types of smarter campaigns can create many technical challenges. Service providers need to process high volumes of real-time location data for millions of subscribers and combine it with other data, such as subscriber lifestyle profiles, websites searched, and purchases and usage information. Combined data must be immediately analyzed so that a highly targeted promotion can be generated in real time.

Mobile couponing requires CSPs to have the ability to:

1. Analyze continuous streaming data in real time2. Create predictive analytics models from data in motion and

other data3. Perform high-performance analytics on historical,

unstructured and semi-structured data4. Apply discovery analytics 5. Visualize, explore, investigate, search and report on data6. Take action based on intelligence provided by analytics

The following overview highlights the IBM Advanced Analytics platform and the role each piece plays in mobile couponing campaigns, as shown in Figure 1.

The IBM Advanced Analytics platform, based on the IBM Big Data and Analytics portfolio, provides a complete set of solutions for CSPs that want to deliver smarter campaigns (including mobile couponing) and other big data analytics capabilities.

4 Creating smarter campaigns with the IBM Advanced Analytics platform

Discovery

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Figure 1. The IBM Advanced Analytics Platform spans six critical functionalities involved in mobile couponing campaigns.

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Stream processingStreaming data sources such as network events, CDRs and extended data representations (XDRs) deliver continuous data feeds to the platform. This data in motion is captured and analyzed by IBM® InfoSphere® Streams, a streaming data processing engine, to immediately identify specific events that require sub-second responses (see item 1 in Figure 1).

For example, a subscriber, Susan Smith, who has opted into a CSP’s mobile couponing service, is shopping at her local Valley Vista mall around dinnertime. She is presented with a coupon for 20 percent off dinner at Mama Mia’s, a mall restaurant she tweeted about in the past after enjoying a great meal. Issuing targeted promotional offers to subscribers like Susan based on location, time of day and preferences results in much-higher coupon redemption rates and higher customer satisfaction than offers sent based solely on home addresses.

Create predictive analytics modelsThe provider gains additional intelligence about Susan by analyzing data in motion and applying predictive forecasting or decision-modeling capabilities (see item 2 in Figure 1). IBM SPSS® provides advanced analytics technologies that help the CSP assign mobility and lifestyle profiles for Susan when combined with subscriber data analysis from IBM PureData™ System for Analytics.

• Mobilityprofilescreated from mobility patterns (analysis of location data) classify individuals as “busy bee” (someone who moves around frequently every weekday), “weekday” (someone with a fixed commute pattern during the week), “weekend fun” (someone who goes to many locations on the weekend), “quiet” (someone who does not move around very much) and so on. Once mobility profiles have been

assigned, CSPs can leverage specific profiles to make highly accurate predictions about where customers will be at specific times on certain days of the week. This information can then be used to offer tailored mobile coupons. For example, a subscriber like Susan with a weekday mobility profile may be more likely to commute home in the evening, and therefore more interested in coupons for restaurants and other shops located along her commute route.

• Lifestyleprofiles are defined by marketing analysts to identify specific target segments of subscribers for marketing programs/campaigns. A subscriber’s opted-in social media postings, purchases and web searches are analyzed to identify and assign lifestyle profiles. In Susan’s case, information from these sources identify her as a “movie buff,” “coffee drinker” and “tennis player.” With access to richer information about Susan, her CSP can offer highly targeted promotions that she is more likely to redeem—such as a coupon for free popcorn at a local movie theatre, or a chance to buy one can of tennis balls and get the second one free at a nearby sporting goods store. CSPs can further combine lifestyle profiles (what the subscriber cares about) with the user’s mobility profile (where the subscriber is likely to be) to deliver the right offer (free movie tickets) at the right time (late Friday afternoon) to Susan.

Predictive analytics uses lifestyle and mobility profiles to determine the propensity or likelihood of a subscriber like Susan to respond favorably to a specific offer. As the actual campaign results with subscriber responses come in, predictive analytics updates the propensity for subscribers such as Susan to respond favorably to a future offer of a similar product or service (for example, movie tickets, free coffee or another beverage, or a restaurant coupon).

6 Creating smarter campaigns with the IBM Advanced Analytics platform

High-performance analytics on unstructured, semi-structured and structured historical dataThe IBM Advanced Analytics platform enables CSPs to analyze unstructured, semi-structured and structured data to improve mobile coupon targeting and redemption rates.

• IBMInfoSphereBigInsights™,an enterprise-class Hadoop offering, analyzes unstructured data, such as customers’ Facebook, Twitter and other social media postings, to identify preferences and predict future behavior. For example, if Susan posted a preference for green tea on Twitter or Facebook, the software would note it and might use that information to issue a mobile coupon for iced green tea at a local coffeehouse. Only information that Susan has opted-in to provide will be analyzed, protecting Susan’s privacy, while delivering useful offers tailored to her tastes.

• IBMPureDataSystemforAnalytics performs deep historical analysis on large volumes of semi-structured data, such as the last two years of XDRs for tens of millions of subscribers. IBM PureData System for Analytics can analyze offer responses from these subscribers over years of campaign data and provide specific insights on a segment of subscribers such as Susan. In Susan’s case, this information might then be fed into SPSS to help it tune predictions about whether she is more likely to accept an offer for a particular type of product or service or at a specific time of day.

• IBMInfoSphereWarehouseis a traditional enterprise data warehouse that processes and analyzes much of a CSP’s internal structured, transactional, operational and demographic data. It can be used to segment customers based on income or age, urban or suburban location, value to the company, or other long-term historical habits, and then provide that data to SPSS to help it create more targeted offers.

Apply discovery analytics to data to detect patternsLarge volumes of different types of historical data can be analyzed by IBM InfoSphere Data Explorer to detect patterns and root causes of behavior, identify quantitative or qualitative findings and discover greater levels of detail about data—for example, to determine why a mobile coupon offer worked well in most areas, but is not working in one or more regions. This information can then be used to adjust a campaign or create new offers better suited to these target customers or geographies.

Visualize, explore, investigate, search and report on dataVisualization and reporting tools such as IBM Cognos® Business Intelligence can be used to answer three important questions: What are we doing currently, what have we done in the past, and what should we do in the future?

Cognos helps organizations identify what is working and not working in a campaign, determines which campaigns should be introduced and shows how to increase campaign efficiencies. Campaign managers review Cognos dashboards, reports and geomaps to measure up-to-the-minute campaign results, and simulate different campaign scenarios to more accurately predict which offers will perform best overall, or for specific groups of consumers like Susan.

Take action on campaigns based on new intelligence Campaign promotions and messages can be personalized based on customer profiles, usage, churn risk and preferred communications channel (email, SMS, app message and so on) with the IBM WebSphere® ILOG® rules engine. Campaign managers also use IBM Campaign to execute, manage and track responses to campaigns. IBM Campaign transmits offers to subscribers like Susan, records their responses, monitors campaign key performance indicators, displays a dashboard of a campaign’s results on various dimensions (geography, demographics and so on), and generates reports.

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The IBM Advanced Analytics platform: Supporting smarter campaigns Leading CSPs worldwide are using the IBM Advanced Analytics platform to introduce mobile coupons and other smarter campaigns.

The IBM Advanced Analytics platform includes:

• IBMInfoSphereStreams:A highly scalable, agile software infrastructure that performs in-motion analytics on a wide variety of relational and non-relational data types entering the enterprise at unprecedented volumes and speed from thousands of real-time sources

• IBMSPSS:Predictive analytics software that delivers high-volume optimized decisions to frontline systems and decision makers

• IBMInfoSphereBigInsights: An integrated solution that analyzes hundreds of terabytes, petabytes or more of raw data derived from an ever-growing variety of sources

• IBMPureDataSystemforAnalytics:A high-performance, scalable, massively parallel system that enables companies to gain deep insight from their data and perform analytics on enormous data volumes

• IBMInfoSphereWarehouse: A data warehouse and analytics software platform for organizations that need to transform large amounts of data into useful business information

• IBMInfoSphereDataExplorer:Offers federated discovery, search and navigation over a broad range of data sources to help organizations get started quickly with big data initiatives and gain more value from their information

• IBMCognosBusinessIntelligence:BI software with reporting, analysis, dashboard and scorecarding capabilities that help organizations explore information, analyze key facts and quickly collaborate to align decisions with key stakeholders

• IBMWebSphereILOG: A business-rules management system to automate and govern frequently occurring, repeatable decisions that control critical business systems

• IBMCampaign:A campaign management solution for quickly and cost-effectively designing, executing and measuring customer-driven communication strategies across online and offline channels

For more information To learn more about how the IBM Advanced Analytics platform can help your organization introduce smarter campaigns, please contact your IBM representative or IBM Business Partner, or visit: ibm.com/bigdata

© Copyright IBM Corporation 2013

IBM Corporation Software Group Route 100 Somers, NY 10589

Produced in the United States of America September 2013

IBM, the IBM logo, ibm.com, BigInsights, Cognos, ILOG, InfoSphere, PureData, SPSS, and WebSphere are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml

This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates.

The performance data and client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions.

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