« Standardising the Definition of ‘Telco 2.0’ | Main | AT&T 2.0, IPTV and the BSkyB connection »

Forget Mobile Advertising…Think Bigger

We had a very fruitful discussion at the recent Digital Advertising & Marketing Summit we ran with the GSMA. Over 80 people attended from across Telco, Content and Media Industries with some enlightening presentations from future customers (Mather Advertising, Disney, Ogilvy); operators (Vodafone, Orascom); partner service providers (Yahoo!); trade bodies (Mobile Entertainment Forum, GSM Association, Mobile Marketing Association) and vendor partners (Infospace, Mobile Enterprise, Openet, Infospace and Alcatel-Lucent).

The full write up of the day - including all the brainstorming output and voting - will be made available shortly to participants but there were a few recurrent themes that I can share with you here:

  1. Advertising is a great opportunity because it opens up a new revenue stream from a new set of customers by allowing operators to be a platfom in a 2-sided market. It therefore can contribute to the decline in core revenues and is strategically important.
  2. No it isn’t, just look at the exec summary of STL Partners report Telcos’ Role in the Advertising Value Chain - the global advertising industry is only 25% the size of the Telco industry. Even if operators captured everything, there is no way advertising is going to fill the hole in core voice and messaging revenues. In fact, it isn’t work getting out of bed for.
  3. But Advertising is a great opportunity because it opens up a new revenue stream from a new set of customers by allowing operators to be a platfom in a 2-sided market …

Round and round and round. Several in the room advocating Advertising as the silver bullet and others dismissing it and pointing to the lack of REAL acitvity from the operator community as testament to their perception of the size of the opportunity.

So is this Argument Resolvable?

We think it is.

The problem at the moment is that too many pundits and practioners consider advertising as the end-game for the platform play. An alternative view is that is is just the beginning. It may not be big enough it in its own right but, combined with the other platform opportunities we believe that it is likely to be very interesting.

This leads us to two questions:

  1. What are the other platform opportunities?
  2. We “believe that it is likely to be very interesting” ain’t good enough - where’s the data to prove this?

Research-based Approach

We have decided that researching the broader platform opportunity for operators is the single most important new piece of research we can do. It will complement and build upon our existing reports on Telco Strategy and Advertising and our forthcoming ones on Broadband Business Models and Voice & Messaging 2.0.

The report will focus on answering the 2 questions above and defining how operators and vendors should move forward to realise the vision.

We haven’t yet defined all the platform opportunities available to operators but believe that these are likely to include:

  • Advertising
  • Marketing Services
  • Content Distribution
  • E-Commerce Support (including billing and payments)
  • Voice and Messaging

We will look to define the opportunity for operators in each of these markets; quantify the separate and aggregated opportunity; identify common requirements to deliver each; identify learnings from within and outside telecoms; and recommend how to move forward.

A key component of this work will be value chain analysis of each relevant sector and then defining the potential future role of the operator and the value likely to be captured as a result. The trick will be to work with experts in each market.

We are committed to delivering this for the Mobile World Congress. Any comments and questions on the Table of Contents below, please drop me a line.

————————————————————————————————————————-


The Telco Platform Opportunity

A Telco strategy and business model for the 21st Century

STL Partners Research Report

Table of Contents

14 November 2007


Introduction and Overview - What is a Platform?

  1. Current Telecom Operator Challenges
  2. The Structure and Benefits of 2-sided Markets
  3. Key Success Factors for a Platform Provider
  4. Strategy Implications for Operators
  5. Role of this Report

Telco Platform Options - Scope to Grow & Grow

  1. Scope, Definitions and Methodological Issues
  2. Platform Options:
    1. Advertising
    2. Marketing Services
    3. Content Distribution
    4. E-Commerce Support
    5. Voice & Messaging
  3. Conclusions & Implications

Sizing the Platform Opportunity - United we Stand; Divided we Fall

  1. Advertising
    1. Current Value Chain & Money Flows
    2. Potential Value Chain & Money Flows
    3. Telecoms Operator Revenue & Margin Opportunity
  2. Marketing Services
    1. Current Value Chain & Money Flows
    2. Potential Value Chain & Money Flows
    3. Telecoms Operator Revenue & Margin Opportunity
  3. Content Distribution
    1. Current Value Chain & Money Flows
    2. Potential Value Chain & Money Flows
    3. Telecoms Operator Revenue & Margin Opportunity
  4. E-Commerce Support
    1. Current Value Chain & Money Flows
    2. Potential Value Chain & Money Flows
    3. Telecoms Operator Revenue & Margin Opportunity
  5. Voice & Messaging
    1. Current Value Chain & Money Flows
    2. Potential Value Chain & Money Flows
    3. Telecoms Operator Revenue & Margin Opportunity
  6. Conclusions & Implications

Case Studies - Telecoms is lagging other Industries

  1. Case Studies from Telco
    1. Vodafone (Betavine)
    2. BT (EMP & 21C)
    3. Akamai
  2. Case Studies from Other Industries
    1. Amazon
    2. Google
    3. Ebay
    4. Betfair
  3. Conclusions & Implications

Making the Change

  1. Key implications and recommend actions for
    1. Fixed and Mobile Operators
    2. NEPs
    3. IT Vendors
    4. Investors

Summary

  1. Platform Definition
  2. Platform Options
  3. Platform Sizing
  4. Lessons from Other Industries
  5. Making the Change

Appendices

  1. Glossary
  2. Research methodology
To share this article easily, please click:

Post a comment

(To prevent spam, all comments need to be approved by the Telco 2.0 team before appearing. Thanks for waiting.)

Telco 2.0 Strategy Report Out Now: Telco Strategy in the Cloud

Subscribe to this blog

To get blog posts delivered to your inbox, enter your email address:


How we respect your privacy

Subscribe via RSS

Telco 2.0™ Email Newsletter

The free Telco 2.0™ newsletter is published every second week. To subscribe, enter your email address:

Telco 2.0™ is produced by: