Telecom carriers around the world are turning their attention to advertising as a potential source of revenue, according to Gartner Inc. Gartner forecasts that the worldwide mobile advertising market alone will be worth over $12 billion by 2011 but advised carriers that they will need to rise to some key challenges if they are to realize their advertising ambitions.
"First and foremost, telecom carriers need to differentiate their approach to the advertising market," said King-Yew Foong, research director at Gartner. "This is particularly important, given the fact that advertising money is being pursued by their immediate telecom competitors, consumer device manufacturers such as Nokia, and Internet-related companies like Google, Yahoo, MySpace and Microsoft."
According to Mr. Foong, telecom carriers must take advantage of their access to multiple delivery channels, including Short Message Service (SMS) Multimedia Messaging Services (MMS) e-mail, fixed and mobile Internet search activities, location-based services and broadband/Internet Protocol TV (IPTV) portals. However, he warned that, while doing so, they will have to strike a balance between their ambition to increase advertising revenue and the need to control spam and user privacy.
If telecom carriers are to compete effectively for advertising revenue, they must convince advertisers and marketers of the effectiveness and value of their approach while distinguishing their value proposition from companies such as Google, Yahoo, Microsoft and traditional media such as television broadcasters and newspapers. By developing the skills to enable them to do these things, telecom carriers will also improve their understanding of the advertisers' perspective and how to meet advertisers' requirements, such as audience validation.
Although carriers are not credible players at present, they have inherent strengths that will enable them to fulfill their advertising ambitions. These strengths include their relationships with customers, knowledge of local markets, extensive customer databases, network control and multiple channel access.
"If a carrier can execute its advertising strategy well and overcome the key challenges, it could move quickly to reap the benefits," said Mr. Foong. "Carriers can expect to become an integral part of consumers' lifestyles when they can reliably deliver relevant advertisements to them. This will require closer cooperation and partnerships with other businesses, such as retailers, restaurants and cinemas."
Gartner advised telecom carriers to be persistent in their efforts and take a long-term perspective if they are to seize the opportunities presented by the growing online and mobile advertising sectors. Carriers need to disrupt the current distribution of advertising money between competing media channels and convince advertisers and marketers that their various channels, customer knowledge, analytics and network control features can reach the intended audience more effectively than traditional channels.
Additional information is available in the Gartner report "Dataquest Insight: How Carriers Can Position Themselves to win in the Advertising Market." The report is available on Gartner's Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=709010&subref=simplesearch.