Carriers Need Advertising

Rich Tehrani : Communications and Technology Blog -
Rich Tehrani
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Carriers Need Advertising

I have been saying for over a decade that carriers need to explore ways to deliver enhanced services.

To be fair, some companies are doing this. AT&T has done an amazing job partnering with Apple (the way I hear it, Verizon declined to work with Apple which is why AT&T had the option) and then they have further offered Pandora radio as a $10/month service.

I got to thinking about these services as I was reading an eComm 2008 wrap up from Jon Arnold where he discusses the future of service providers.

One of the points made by Jon is that advertising revenue pales in comparison to current subscriber revenues and as such carriers need to focus on innovating.

While I agree with this notion, I do believe carriers must consider advertising as a major revenue source. Moreover, advertising revenue models of the old days pale in comparison to what is possible with the web, interactive television and location based services.

I have written before about the potential for mobile providers to supply customers with intimately targeted ads based on location and I am still awaiting the fantastic services of the future.

Perhaps the biggest problem service providers face is cultural. Google is an example of a company that seems to be trying to virtually corner the market on developers and then let them loose to develop all sorts of interesting services.

The company innovates for the sake of innovating and some of their ideas are great while others are not.

It would seem as the world gets more saturated with mashups and countless other interesting services, people will be bombarded with useful things to try.

The massive arsenal of developers Google enjoys today will translate tomorrow into that many more eyeballs and users of the company's services.

Service providers today have to continue with existing business models such as competing with cablecos and building better and faster wireless base stations while simultaneously transforming themselves into development houses.

Another option is to partner with software companies that get it. Perhaps social media providers with open APIs can be of some use.

It just seems to me that in a web 2.0 world, you need to consider advertising supported services as a way to pay for your efforts.

Let's face it... Things are becoming free faster than service providers would have hoped. Long distance phone calling is one example and now with base station triangulation we get free pseudo-GPS.

But it doesn't stop there... Consider directory assistance, e-mail, storage, applications, classifieds, news, games, fantasy sports, advice, etc.

Yes Jon, service providers need to innovate but will there be anyone with any time left to pay for the services these companies provide?

I fear that in the future, all service providers need to consider advertising as a viable way to generate revenue.

This does not mean that people will not pay for things like streamed radio over cellular networks but to cover all bases, you should consider diving deep into ad-supported business models.

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