STL Partners, who we worked with in writing the Telcos in Advertising report, have written up the
notes of the day 's session held at the end of the Telco 2.0 Brainstorm. I sadly couldn't be there due to our work at the
BBC Innovation Lab, so the next best thing is a link and a quick summary of the day.
Here are the main narratives from the presentations of the day.
Recurring themes throughout the day
1. Standardise. Need to develop a standard approach to content and ad delivery (standard formats, business models, metrics, campaign management, customer profiles)
2. Metrics/Measurement. These are a critical differentiator for mobile (and on-line) advertising and go hand-in-hand with the ability to use the mobile as a tool for responding to advertising.
3. Broaden the Ad Platform. Operators underestimate the value they can offer in this area (and the threat the represent to the internet search engines) owing to the breadth of their assets. They need to develop a ‘platform’ that encompasses ALL their assets if they are to take full advantage of the advertising opportunity.
4. Technical. For mobile, need sufficient bandwidth (and guaranteed connectivity) to deliver content and advertising and, for fixed and mobile, effective (federated) identity management capability to orchestrate the sharing of customer data (profiles, entitlements and analytics).
5. Usability. The end-user experience remains paramount. For mobile, content (including advertising-related content) needs to be ‘made-for-mobile’ (with a 3-clicks-to-find rule) and, for fixed and mobile, demonstrably safe and private for end-users.
6. Industry Collaboration. A go-it-alone strategy is doomed to fail. The industry needs to work together to grow the advertising cake. This does not preclude strong competition and individual company activity but this must complement the wider issue of building something of value to the new customer - the advertisers.
7. Innovation. Operators are (often unfairly) criticised for their inability to innovate. The advertising opportunity will be a test of their capabilities in this area since it will require delivery of new services to new customers with new business models. Now is the time for operators to develop robust processes to manage the innovation process for advertising and other new business opportunities.
Most of this came up in our research, but its useful to have it corroborated. Points 6 and 7 are about execution, and both pose very significant issues for Telcos.
The Big Issues for Telcos though, in our view, is that the Convergence is not just about technologies, its about business models, and the Media's Ad supported model is vying with the Telcos subscription based model (and the Web 2.0 Media's "dotcom 2.0" models) - and Free is a very attractive proposition.
Although the overall Ad market is a fraction of the overall Telco market (about an order of magnitude) it is big enough to cause major disruption, especially in consumer based data services.
For Individual Operators therefore, there is therefore a need to understand how best to deal with Advertising as it moves into the comms arena. Conclusions from that the day were that the core areas to address for individual Telcos were:
1. Rigorous analysis of real addressable market(s), cutting across not only mobile, but also cable, ISP and TV (if a converged operator).
2. Develop a ‘flexible strategy’ (based on a start-up mentality) that enables changes of direction as opportunity becomes clearer supported by a ‘best-efforts’ business case.
3. Create a dedicated and flexible organisation which operates outside the structured processes and culture of the core business.
4. Continue partnerships and trials to develop understanding of customer experience and operator/partner roles and business models.
5. More creative customer segmentation - micro-segmentation to establish framework for targeting and personalisation of content and advertising.
6. Define rules for automating the CRM processes and systems required to support a data-driven advertising platform.
A number of these points represent significant challenges for any Telco that is organised along stovepipes and traditional subscription based business models.
Interesting times.....
