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.

  • Ben
    August 22, 2009 at 2:57 pm

    As they advertise, they increase their prices, and they reduce their services. A few years ago, I used to get almost all services free, but now I am paying for it. Within cell phone industry, not much they could do within US, unless they come up with different services that they can offer. Now days, kids have cell phone and text messaging, back in my days, I would be luck to have a payphone near by the works and accepts quarter to make a phone call. I think advertising should be for overseas and minimal in us. Just give better quality of service and people will come to you.

  • Rey
    October 5, 2009 at 10:48 pm

    Very good article indeed. Thank you for posting it.

  • Noureen
    October 6, 2009 at 9:48 pm

    Advertising is good, but they need much better customer services. AT&T may be very good in advertising, but they have done some of the worst customer relations for decades. They have charged billions and billions of dollar to consumer for nothing but just greed to make more money in 80s, 90s and early part of 2000s. They are not doing it as much as they did it before, but they are still doing it.
    Customer service is more important than advertising.

  • Joshan
    October 6, 2009 at 10:05 pm

    Both of advertising and customer services are important. But AT&T is the worst provider of all time.

  • Mike
    April 22, 2010 at 4:10 pm

    Hey, just letting you know that I do cheaper advertising on the web. We are like the yellow pages but better, and you can even keep track of the traffic going in and out of your ad. We can advertise through a sigle zip code when most companies wont. We will put all the info you will ever need on your ad plus pics! Any information that you will need to know will be on the website including my contact number, just ask for Mike. So go to http://discountproducts.zurvitaads.biz and save time and money!

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