Campaign UK

Tele­coms is locked in bat­tle with tech over me­dia spoils

- GIDEON SPANIER

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 pack­age.now 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.

gideon.spanier@hay­mar­ket.com @gideon­spanier

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

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