The mobile marketing and advertising game has changed. Verizon’s acquisition of AOL in May ushered in a new era, signifying how mobile operators are now moving into this space in order to claw control away from Facebook and Google. They are now in a position to handle their own advertising and work with enterprises, agencies and brands for the same, generating a new and highly lucrative revenue stream. In turn, brands will have a new channel through which to push their messages; and this platform will be more targeted and wider reaching than anything that’s come before it. However, to recognise the true implications of the involvement of mobile operators in the advertising and marketing sector, we first need to understand the value of AOL’s acquisition.
The obvious perception of Verizon is that it’s a mobile operator. But, actually, like most major players today in the mobile space, Verizon has been dipping its toes into the marketing sector for a while. Mobile operators know an awful lot about their millions of users. In fact, as today’s subscribers do almost everything on their phones, each web page loaded, app opened, message sent and call placed helps to paint a colourful picture of their individual likes and dislikes.
Mobile operators, therefore, have better insights into user behaviour than any other internet company, making the mobile network a treasure trove of high-value information for agencies and brands. In this context, Verizon’s acquisition of AOL (largely driven by AOL’s advertising platform) demonstrates how operators are now monetising through marketing and advertising the subscriber data they generate.
This significant market shift has partly come about because the process of making money from the mobile network isn’t the same as it was a decade ago. Today, the primary source of mobile operator revenue is giving subscribers’ consistent and reliable access to mobile data. This has irrevocably changed the operator business model, forcing them to look for new ways to drive value from the network. Many are now partnering with big data analytics players in order to do so, recognising how it’s only by unlocking the value of the tremendous amount of data their networks are generating around the clock that they can open up an entirely new set of commercial opportunities.
The AOL/Verizon deal may have helped to elevate mobile operators into the position of key players in the advertising sector, but it’s not the only one changing the game. Companies like Telefonica Digital with its Smart Steps, for example – which “uses anonymous and aggregated mobile data to help organizations make better business decisions based on actual behavior” – are making huge strides in the ad tech space, specifically working on projects focused on out-of-home advertising, audience qualification and ad-effectiveness measurements.
According to recent eMarketer estimates, mobile is the fastest-growing advertising format, generating $42.6 billion in global revenues in 2014. This is expected to increase by around 60 percent to $68.6 billion this year.
Advertisers need to understand that poor context and relevance will jeopardise their efforts, and accurate location is the key to improving these two aspects. According to a 2015 study as published in GPS Business News, only 37% of geo-tagged mobile ad impressions are currently within 100 metres of the user’s true real-time location. There’s much room for improvement.
Undoubtedly, more will follow in the months to come and will challenge Facebook and Google’s grasp on the mobile advertising market, opening up a range of new opportunities for brands. Advertising on an operators’ network promises to be targeted and relevant to the intended audience. When operators work with brands to deliver location-based subscriber information, they can facilitate highly targeted promotional campaigns.
Concern over being branded a dumb pipe has threatened mobile operators for years, but now there’s light at the end of the tunnel. Verizon’s acquisition of AOL represents an important shift within the mobile sector, with the potential for more operators to become highly targeted advertising and marketing providers in the near future. All that’s required is the technology to harness the power of the valuable data their networks are generating around the clock, which puts big data analytics at the forefront for growing new revenues, and brands to recognise the value of that data.
By Guillaume Le Mener, Head of Data Monetisation at Tektronix Communications.
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