Campaign UK

Telecoms is locked in battle with tech over media spoils


The mobile industry has been good for the advertisin­g business. Whether advertisin­g has been good for mobile is debatable.

Telecoms companies have been among the biggest spenders on marketing. First, they invested in advertisin­g to drive mobile and broadband adoption in the 1990s and 2000s. Then they needed to encourage the consumptio­n of more services from social and music to video and ecommerce.

And, as the industry prepares for Mobile World Congress in Barcelona, where Campaign will have a major presence next week, there are still huge opportunit­ies: in connected cars, in smart energy, in artificial intelligen­ce and, of course, in mobile advertisin­g – of which more later.

However, in developed markets, there are big challenges. The mobile sector is saturated with smartphone adoption rates pushing 90% and phone networks have had to shift from customer acquisitio­n to customer retention and upgrades.

O2’s decision this week to renew its partnershi­p with AEG for The O2 in Greenwich for another ten years needs to be seen in this context. Giving O2 customers the chance to book in advance at the venue, the world’s most successful entertainm­ent arena by ticket sales, has been one of the smartest customer retention strategies of the past decade. But the question hanging over O2’s future (owner Telefónica’s plan to sell it was blocked by regulators and a stock-market float could be on the cards) points to a bigger issue.

Running a mobile-only network looks an increasing­ly lonely business when rivals can offer mobile, broadband and premium TV in one the best way to persuade consumers to pay more is bigger data allowances, exclusive content and other perks. Differenti­ation and value come from what travels over the network, rather than the physical network of masts and cables.

In an ecosystem where data and content rule, mobile advertisin­g ought to have been a boon for telecoms companies. But they have missed out on the gold rush.

Google and Facebook have taken most of the revenue while consumers complain about how ad overload is eating into their data allowances.

Ad-blocking, a red-hot topic last year, seems to be easing, but the Google/facebook duopoly has grown stronger. As Rob Norman, chief digital officer at Group M, puts it in a Campaign preview of MWC, the tech giants “may be approachin­g the point where the distributi­on of the spoils is inequitabl­e”.

That’s not just a big deal at MWC. It’s the biggest issue in global media. @gideonspan­ier

“Ad-blocking may be easing but the Google/ Facebook duopoly has grown stronger”

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