How leading operators are building sustainable advertising businesses - Lessons learned from Sprint
There has never been a better time for telcos to establish a profitable role as a market enabler in the mobile advertising ecosystem. In the recent report: 'Connecting Brands with Customers: How leading operators are building sustainable advertising businesses', STL Partners analyses how 3 telcos - Sprint, Turkcell and SingTel - lead the way in leveraging permission-based subscriber data. Today's mobile marketing ecosystem is dynamic and complex. In this report, STL Partners is leveraging First Partner's ecosystem mapping to examine the strategic approach of three telcos, all of which have successfully grasped the mobile advertising opportunity, illustrating both differences and similarities and identifying lessons learnt along the way.
Here we are giving you a glimpse into one of our case studies, Sprint:
Reasons for Sprint's success
With a track record for innovation, Sprint has concentrated on making data matter, setting up a separate company Pinsight Media+ to analyse the telco's first party customer data and to establish a business relationship with the digital marketing industry. The following ten factors are considered to be instrumental in the success of Sprint's venture:
1. Outsourcing the development and management of task-specific platform
2. Technical capability to build highly scalable infrastructure
3. Recruitment of quality personnel (with telco and/or advertising experience)
4. Acquisition of small companies to accelerate growth
5. Understanding how to work with large scale operators
6. Building trust within ecosystem - both buy-side and sell-side
7. Positioning in ecosystem (value of first party authenticated data)
8. Integration and enhancement of mobile subscriber data with third party data sets
9. Understanding of services model within advertising & marketing industries
10. Incentivised value exchange with subscribers
A track record in innovation
Sprint was an early innovator in the provision of advertising content to its own subscriber base, defining and developing the on-deck proposition, offering brands the opportunity to place targeted ads displayed at the top and bottom of Sprint-branded mobile Web pages. In 2010, the company was awarded Frost & Sullivan's 2010 North American Customer Value Enhancement of the Year Award in On-deck Mobile Advertising, in recognition of the strategic advantages of Sprint's mobile advertising service:
- Customer relevancy and privacy
- Open approach
- Strategic roadmap
Encouraged by this early success, the company's strategic objective was to extend this data-driven approach from on-device inventory to the broader mobile advertising marketplace, extending the data targeting options to enhance advertising audience selection in mobile internet, mobile apps and beyond. To achieve this objective and to fully realise the value of subscriber data, Sprint reconfigured its mobile advertising offering to control and enable the flow of data within the ecosystem.
In late 2012, Sprint launched Pinsight Media+, a new mobile advertising platform (incorporating a DMP and an ad exchange) enabling brands to target advertising campaigns based on opted-in subscribers' preferences and behaviours. This venture enabled the telco's subscribers to see usage-based ads delivered according to their personal interests across third-party properties for the first time, in addition to operator-owned properties like the Sprint Web on-deck portal and Sprint Zone account management app.
Making data matter & Enabling the advertising ecosystem
Sprint's approach to mobile advertising is multi-facetted. The telco identified different roles within the ecosystem to provide enabling services, acting variously as publisher, audience profiler, data broker, data analyst and platform provider as a route to "democratizing" the data (see mapping of core capability / resources and focus of attention on Figure 8).
Sample Image from the Case Study (Figure 8):
Source: First Partner, STL Partners Analysis
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