Feature Article

October 14, 2013

AT&T Mobile Ad Effort Shelved

Nobody said creating new revenue sources was going to be easy. It isn’t. Though other service providers, such as SingTel, continue to successfully operate mobile advertising platforms such as Amobee, AT&T is closing most, if not all, of its AdWorks offices and ending one experiment in mobile and digital ad sales, though it will press ahead using its own inventory.

Adworks was intended to create a network of mobile publishers offering inventory to advertisers, enhanced by the use of AT&T anonymized data. Instead, it appears AT&T will refocus on making its own inventory available to advertisers.

Adworks was one expression of the notion that large service providers can expose features of their networks (in this case user behavior patterns, anonymized) to third party business partners, generating revenue. That still makes sense.

The plan was to use anonymized customer data to help guide ad placements and offer a one-stop shop for television, online and mobile ads. In future iterations, that likely will become a reality.

But observers of the telecom industry might say it often happens that service providers do not “get it right” the first time. Sometimes it takes a while, and that is likely the case here.

Also, telcos in the past have found it works better to acquire expertise and traction by buying a firm already doing what the telco wants to do, rather than growing such operations organically. Amobee, for example, was an independent business when SingTel acquired it.

It would not be out of line to suggest that when many tier-one telcos do acquire a sustainable role in mobile advertising, it will be through acquisitions, not internal development. For starters, scale is required, and even a firm as big as AT&T arguably does not control enough inventory to compete with the likes of Google or Facebook.

Google represents something on the order of 53 percent market share of mobile advertising. Facebook represents possibly 16 percent. In other words, some 69 percent of global mobile advertising revenue presently is earned by just two companies.

That would be tough terrain for any other competitor, not just a telco.




Edited by Rachel Ramsey


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