Users earn one credit for every $300 they spend on Verizon Wireless products and services on their monthly bills (before fees and taxes) that they can use to claim concert tickets or discounts on new devices,
According to the Wall Street Journal, these are in return for a range of data, including web-browsing history, app usage and location data, which can be used to personalize rewards.
This data will also be shared with Oath, the unit created from the acquisitions of AOL and Yahoo, in order to tailor advertising.
Currently, Verizon has only around 4% of the US digital advertising market, which is dominated by Google and Facebook which together account for the majority of the market, but that could rise if consumers are ready to trade off personal data for perks.
Verizon makes it clear during the sign-up process what data consumers are giving up, the Journal added.
“Some of our competitors, they have exactly the same thing, it’s just buried in the terms and conditions of the service,” noted Diego Scotti, Verizon’s chief marketing officer. “We are not hiding anything.”
He hoped that the combination of disclosure and rewards would help make Verizon customers, especially younger ones, more loyal.
But one observer suggested that the transparency could actually be a hindrance. “This just highlights how thorny privacy issues can be for telecom operators,” said Craig Moffett, an analyst at MoffettNathanson.
“If they are going to be held to a higher standard than Google and Facebook, either by statute or simply by convention, then it will be very hard for them to effectively compete.”
While Verizon’s program allows customers to opt out of data-sharing after they have signed up for Verizon Up, it can still keep the data for three years.
Data sourced from Verizon, Wall Street Journal; additional content by WARC staff