Verizon has offered to install apps from major U.S. brands on its customers’ home screens for $1 to $2 per device, according to a report from AdAge.
The nation’s largest wireless carrier quietly began pitching the marketing scheme late last year to retail and finance brands, among others, AdAge said. The model works only on Android phones, which handset manufacturers and carriers can customize to a degree, while Apple’s iOS is more tightly controlled.
Verizon declined to comment to AdAge on the news, and the carrier’s representatives didn’t immediately reply to a request for comment from FierceWireless.
The marketing model, which appears to be unprecedented among U.S. operators, is clearly a high-risk, high-reward strategy for Verizon. While installing branded apps on phones could be extremely lucrative, it also risks vexing the customers who are the core of Verizon’s business. And as AdAge noted, pre-installed apps can’t be targeted, limiting their appeal to potential advertisers.
But Verizon has been outspoken about its ambitions to grow its mobile advertising business in an effort to counter slowing growth in the U.S. smartphone market. The carrier last month doubled down on its bet in digital media, agreeing to buy Yahoo’s core online business for $4.83 billion. Last year it ponied up $4.4 billion to acquire AOL, which included properties such as The Huffington Post, Engadget and TechCrunch. And it also bought the mobile advertising firm Millennial Media and has expanded its mobile video and advertising business with the launch of Go90.
"The whole theory behind (Go90), which we believe will win at the end, is to give all this content to the wireless customer for free, and we'll monetize it in a different way than having them pay for the consumption," Verizon CFO Fran Shammo said earlier this year. "But we also know that the consumer is going to have only so much wallet share for quote 'communications,' which wireless, broadband and cable fall into…. So we know that there's a limit. So we have to be able to have them consume more, but monetize that consumption in other forms. And that's how we got to the Go90 model, and that will be monetized through the advertiser and that will of course increase revenue and that will contribute to the bottom line."
Verizon’s efforts to develop new revenue streams in an increasingly difficult market for traditional wireless services are understandable. But whether the carrier can expand beyond its core business into digital media and advertising – and whether it can deliver offerings customers truly value – is still uncertain.
- see this AdAge report
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