For years, telecom operators have watched as over-the-top services utilize their networks to deliver revenue-generating services at the expense of operators’ traditional revenue sources, such as voice and text messaging. Verizon Communication’s recent acquisition of AOL sent shock waves through the industry, raising many questions and opening mobile operators’ eyes to possible new opportunities. At long last, mobile operators are ready to get their own piece of the pie. The acquisition revealed mobile operators have massive amounts of valuable data that can provide a crucial advantage in the advertising realm. And now, with Verizon-AOL buying Millennial Media, it is clear that the opportunity is ripe for creating digital advertising revenue streams by leveraging data only a mobile operator owns.
As we know, mobile is quickly becoming the center of today’s digital economy. With time spent on mobile devices now greater than desktop, Verizon’s acquisitions demonstrate recognition that in order to be a winner in today’s “always on” mobile economy, operators – with their stores of real-life, high-quality data – should join the advertising ecosystem to claim their share of a multibillion dollar market. Their unique intelligence, such as device location and user behavior, goes way beyond what advertisers already know from subscriber browsing or in-app activities. Mobile operators have the golden ticket – their data will allow them to help advertisers to deliver extremely targeted ads at a very large scale.
Advertisers are constantly looking outside their own domains to gain advantage through data. While advertisers can create their own data management platforms to store and analyze data from different domains and demand side platforms to buy advertising based on that information, they do not have access to the rich data that belongs to the operators. Since operator data is not available on modern ad buying platforms, advertisers are limited in their abilities to provide truly accurate targeting. Meaning advertisers aren’t maximizing the reach of their ads and consumers are being subjected to marketing that is not relevant to them. It’s a “lose-lose” for the advertiser and the consumer.
Additionally, mobile operator data assets allow advertisers to shift from advertising based on online behavior to the mobile-appropriate methods of utilizing physical-world venue visits – something that consumers will greatly benefit from. For example, let’s say a woman enjoys coffee each morning on her way to work. Her mobile operator would be able to anonymously use this data to recommend an advertisement for a coupon for a coffee shop along that route, hopefully enticing her to pick the shop as her favorite for her daily morning routine. Collaboration between all players creates a new type of ecosystem that opens up possibilities for better ad targeting – a benefit to every party.
Meanwhile, while advertisers look for a smarter, less intrusive way to reach consumers, operators are dealing with flat or declining revenues from traditional services and looking to tap into new revenue sources.
Due to the real life insights that only operators possess, mobile advertising presents itself as a very powerful new revenue stream, allowing them to monetize their data assets.
Mobile operators sit at the heart of the mobile lifestyle movement, and they are now realizing how valuable their role is in driving the new Internet economy that has been created by the popularity of mobile devices. Until now, mobile advertising has been modeled after an outdated desktop model. Verizon’s acquisition has changed this game. 2016 will be the year that operators start to realize their advantageous position and transition from simply delivering revenue-generating services for others, to utilizing their own untapped assets to claim a large share of a multi-billion-dollar market.
A recognized expert in Internet and telecommunications technologies, Alex Zinin is the co-founder and CEO of Cinarra Systems. He is the author of multiple patents, Internet Engineering Task Force (IETF) RFCs, and a book on Cisco IP routing, which has been dubbed the IP routing “bible.” Prior to co-founding Cinarra, Zinin was the CTO for Cisco Systems’ service provider business, in Asia Pacific and Japan.
Editor’s Note: The RCR Wireless News Reality Check section is where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.
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