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Advertising Opportunities: Do Telcos Understand the Value of their Assets?

Knock Me Down with a Feather…Another Telco 2.0™ Survey?
In the last of our Autumn and Winter series of surveys, we have now opened the survey on Telcos and Advertising. Why 3 surveys? Well, they add real insight to the 3 Telco 2.0™ Strategy Reports we are publishing: Telco 2.0 Market Study, Strategies for Growth in an IP based World (updated January 2007); Consumer Voice and Messaging 2.0: Telephony and Messaging meet Skype and Yahoo!; Telcos and Advertising: How to Generate Value. And anyone who completes the survey gets a FREE set of summary results.

For the Advertising survey, we have been very lucky that the GSM Association have sent the link to mobile entertainment and advertising executives in their database and OgilvyOne have circulated the link internally to 400 people in their Telco Taskforce. We should, therefore, get some terrific input from the advertising community (see below for some early indications).

Telcos and Advertising Industry Workshop: 30th March, London
We will be presenting the results from the survey and our analysis at the workshop on how telcos can generate value from advertising on Day 3 of the Telco 2.0™ Event. There will be a number of senior stimulus presenters from the Telco and Advertising communities and we will be exploring what the attending influencers and decision-makers need to do to realise the opportunity.

The event is invitation-only and invitations will be going out in a couple of weeks.

If you would like to join us, or feel there are people who should be part of the debate, please email me.

The Advertising Landscape
In our survey, we have been asking respondents to consider advertising opportunities for Telcos in fixed and mobile. Essentially, we see these falling into 4 quadrants:

  • Telcos funding or subsidising their service portfolio (voice, messaging, content) to their own customer base with advertising (quadrants 1 and 2 below).
  • Telcos leveraging their assets to create enabling services that improve the overall efficiency and effectiveness of digital advertising channels (quadrants 3 and 4 below).

The survey (and the report) explores opportunities and challenges in each of the 4 quadrants.
Telco%20Advertising%20Market.png Do Telcos Underestimate their Advertising Assets?
The survey has recently launched and so far around 65 Telco 2.0 cognoscenti have completed our beautifully crafted efforts. I pulled off some results when we reached 50 respondents yesterday. Interestingly, we have almost a 50:50 split between the Telco and Advertising communities, which makes comparing viewpoints on similar questions very interesting.

For example, in the survey we ask respondents to rate assets and skills of Telcos that could be valuable to Advertisers from ‘Very High Value’ through to ‘Little/No Value’. The following assets and skills are evaluated as potentially valuable to Advertisers:

  1. A big customer Base - Reach
  2. A broad customer base - Demographic Mix
  3. A record of customer usage & preferences - for campaign planning & targeting
  4. Real-time information on customer activity - location, calling, internet usage - for delivering contextually relevant ads
  5. Other customer data - name, address, credit history etc.
  6. A fixed portal presence
  7. IPTV/Video-on-Demand products
  8. Voice and Messaging (SMS, MMS, Voicemail) products
  9. A mobile portal
  10. Mobile device menu/idle screen
  11. High street retail presence (shops)
  12. Customer billing relationship
  13. Customer service - call centre/in-store
  14. A strong and trusted brand

Below is a chart of average results for Telco respondents and Advertising respondents:
Value%20of%20Telco%20Assets.png

A couple of things strike me about these results:

  • Although the results between the 2 groups are closely correlated (r2=0.86 for the mathematical amongst you), overall Telco management perceive telco assets and skills to be substantially less valuable to Advertisers than Advertisers themselves
  • In particular, Telco respondents were substantially less positive than Advertisers about the value of:
    • The Telco Brand. I know several telcos have been getting a bit of bad press about customer service (e.g. Talk Talk) and results (e.g. Deutsche Telekom) but it seems that Advertisers feel that the Telcos have a strong and trusted brand with which they would like to be associated.
    • Customer Data. Ha! We have been banging on about this for a while and I’m delighted to see that Advertisers agree - Telcos underestimate the value of customer addresses/demographics/credit history etc. which they hold
    • Voice Products. Seems like Advertisers would like to be associated with Telco voice products (or to use them specifically as a delivery channel). As we have already said, this represents an opportunity but also a cannabalisation risk to existing Telco subscription revenues.
    • The Mobile Portal. Advertisers obviously feel that success of internet portal advertising is replicable to the mobile portal, Telco respondents are less confident.
    • IPTV and Video-on-Demand. Many respondents from the Advertising community have already commented on the near-term opportunities for growth in IPTV and Mobile TV advertising because it combines a well-understood format (by both advertisers and consumers) with the potential to offer greater targeting and personalisation.

It may not be a Knight in shining armour, but while operators want to provide premium content and develop a future potential revenue source, advertising remains an attractive potential (unproven) option. It could enable operators to increase the volume of content AND reduce pricing and so avoid the criticism that has been levelled at Virgin Mobile in the UK with its TV offering.

The survey is jam-packed with questions about Advertiser needs and Telco attitudes to Advertising and challenges respondents to think through WHAT NEEDS TO BE DONE TO MOVE FORWARD. I’ll share more snippets over the next week or two but, in the meantime, here’s the survey link again - get cracking cos it closes midnight on Friday 26th January!!

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