Five reasons why Operators will not dominate Mobile Advertising ..

I have had this discussion with a number of people – and again today with a person working for an Operator.

My view is .. Unless Operators change their current thinking, they will not dominate Mobile advertising .. (and as a caveat I believe that Mobile advertising will be very big in the next few years .. )

Here are five reasons why

a) People don’t buy music from their electricity company .. i.e. the Telco brand is basically not suited to media(and hence by extension –advertising). The customers know this – and many in the Operator community also recognise this.

Thus inspite of good intentions, the world of media and advertising does not come as naturally to a Telco exec as does networks and devices. Customers will never see an Operator as a cool brand(and by extension be reluctant to accept advertising from such a brand)

2) Operator portals have never quite taken off. This means advertisers don’t really have a property to advertise on

3) The operator’s x million customers don’t really equate to eyeballs. This is a big problem. Yes an operator has x million customers. A very small portion of these use data services(excluding SMS). Even smaller numbers use their own portals

4) The operator does not grasp the concept of self service and long tail.. Whichever way you look at this, the mobile advertising market is in a nascent phase. The top down heavy handed approach does not work for this stage. See Crossing the chasm with the long tail: Mobile web 2.0, mobile advertising, user generated content for a more detailed explanation as to why this is the case.

5) Most importantly, while the Operator ponders – others grab this space BIG time. So, a market exists – it’s just that the Operators are not getting anything there(and this is before Google has entered the fray!). Admob continues to go stratospheric with about 8 billion ads served in total and averaging 1.5 billion ads a month. Itsmy (gofresh) serves 250millionth Mobile Internet Ad

Both are 100% mobile web and 100% off portal.

Contrast this with very few operators who will release stats for their portals!!

So .. I think

a) Mobile advertising will be huge .. there is direct evidence for this for ex: admob and itsmy

b) Unless the Operators change their current thinking, their share will be very low

Thoughts?

Comments

  1. Chang says:

    I am constantly amazed by why the operators are not hiring more web 2.0 savvy people (with the term web 2.0 here meaning a broader sense of innovations currently going on at the web and mobile scene) Stop hiring MBAs and Ivy graduates – start hiring bloggers and early adopters, and listen to what they have to say! Infuse some creativity genes to the company’s gene pool!

  2. hans says:

    on the contrary, i think operators are actually well placed to capture a slice of the advertising pie:
    * they control the device distribution chain and the software that is bundled/installed on phones
    * they can deploy proxies to filter mobile web requests or redirect them to the larger web in order to bypass the specialized “mobile internet”
    * they can control the envelope of the content requested by the user so as to insert advertising in headers and footers
    * they sit on a vast set of user profile data that can be exploited to segment and target the advertisements to the preferences of the receiver (this data is much more likely to be used INSIDE the operator’s domain as opposed to off-portal)
    * they have a strong business imperative to create another revenue source for mobile content when the user’s willingness to pay is reduced (no-one is going to download a ringtone for £5 anymore)
    * they have started to realize that business partnerships with yahoo and/or google represent a two-edged sword

  3. Ajit Jaokar says:

    Interesting comments Hans
    esp ‘they have started to realize that business partnerships with yahoo and/or google represent a two-edged sword’
    I will be blogging a lot more about this and your comment is a good trigger to do so. Shall add more to this and link back to your comment kind rgds Ajit