On the phone, I am on some app or another, mostly global and local news sites and social media platforms. We are all consuming information on news, entertainment, or topical knowledge based on our interests. A significant amount of time is spent online. Sometimes, we get push and SMS notifications for personalized messaging and offers. Data is being gathered about my interests. I have consented to marketing cookies; therefore, I do receive messages that are targeted for me, and it works for me! That is the type of background and context, type of content, usage that matter to brands and companies.
The convergence of telcos to harness the power of data with media for sharper marketing
- It is a high CAPEX industry, keeping up with technological changes, the high spectrum of network costs, and the need for innovation. This is exacerbated by lower lifetime ARPU (average revenues per user), caused by inertia in the ecosystem.
- Customers are spread across multiple products, which sometimes overlap between B2B and B2C ecosystems, making it difficult to dismantle legacy products and systems. Therefore, it is an uphill task for telcos transforming into a digital services provider.
There is a need for the telco industry to become more customer-focused and improve its digital and marketing model transformation to compete and win today’s and tomorrow’s customers effectively.
What telcos can do NOW to rightly pivot
Telcos are not dominant players in digital advertising, but they should be. Two of the most important parts of the ecosystem that make for great advertising are telco data potential and its enhanced targeting through its safe and compliant monetization.
A recent survey by Ovum, with more than 300 brands in the US, France, and the UK , exploring their usage of big data in digital advertising along with their perception of telco assets in this domain, posits that “brands today go directly to Google (59%) and Facebook (52%) for their digital advertising needs, which is not surprising as these two are major, established forces in this domain. But what is more surprising is that one in four brands also partner directly with a telco that specializes in big data and mobile advertising.” This indicates that telcos with the right capabilities can play a role in the digital advertising value chain.
- Brands are willing to pay more for enhanced targeting and build unique segments using first-party data to better create useful audiences. The analytics and insights supported by propensity models make this a valuable proposition for brands. Especially, think of the cycle where more brands must rely on alternative sources of reaching the relevant audiences in the post-cookie marketing world. Innovation and attention to marketing analytics are essential for insights generation.
- There is an untapped opportunity for revenue diversification as growth in digital advertising spends is set to be on the rise. The region should see its first year of growth since 2014, with an anticipated 10% rise. Digital will reach a 65% share of the total marketing spend. Therefore, mobile app and streaming services, marketplaces, and online web assets will see demonstratable value in monetization and the formation of co-ops.
- Data will remain the key reason for brands to forge on the growth path, turning the business of customer performance into the business of experiences. The model of experiences will include growth from services that include marketplaces, cloud, cybersecurity, interactive and immersive experiences. More importantly, the data crumbs will enable more players with their assets like telcos to fuel further growth.
- The new reality has forced businesses to look at how people experience their brands and the fluidity of experiences galvanizing the most important customer. Channel optimization, CRMs, innovation, marketing model transformation, sales, services functions’ effectiveness, and alignment with products/services are essential. It wouldn’t be surprising to find a telco becoming the next super-app powering your shopping, bills, payments, offers management, deliveries, charities all in one place! That’s diversification at its best.
- Shopping habits will be very digital-focused, which means Amazon, Google, Facebook, and other local partners will continue to play a big part in helping brands create their outreach via a full-funnel approach. This means that telcos that can generate performance and brand-driven capabilities with data monetization of their insights and first-party data; loyalty programs will see participation on an always-on scale of driving return.
- For brands using telco data assets, 64% said they are drawn by the depth and breadth of data available. A few examples of this include real-time location data, network intelligence, transactional data, content usage, app usage data, smartphone manufacturers, voice/messaging, and also the ability to build segments in the customer data platforms super-laying first- and third-party data ecosystems that could box retirement groups, families, younger people, and youth into interest groups and classifications that make it easier for brands to connect with them in their native states of browsing or experiences of app and web.
Our region’s telcos need to ACT now to realize their full potential with the next-generation marketing model transformation. With the onset of new services, companies are setting afoot into disruptive territories, bringing the overall industry to open their eyes to the agility of changes coming soon. We hope the UAE will not lose its first-mover advantage in a space that they can own. David Fregonas, Accenture Interactive’s Lead in the Middle East, stresses that the next generation marketing mindset requires executive sponsorship and senior SMEs to drive leadership and organizational excitement and buy-in to invest in multi-disciplinary talents, technology enablement, and usage to champion the cultural change top-down.
Another wolf in the woods, the OTT players, are becoming content creators, streaming engines, and usurping the attention of the segments desirable to advertisers. Ivano Collini, a telco expert with Accenture Interactive in the Middle East, says: “Global and regional streaming players and those with Arabic content and regional shows represent a need for telcos to further integrate their TV linear audiences with streaming capabilities.” This is essential for telcos to either continue competing for user attention in the SVoD space or risk being entirely overtaken from lack of partnerships, integration of content, data, and therefore advertising and digital capture of users and brands attention.
We find that telcos that actively invest and grow their digital engagement capabilities by combining multimedia advertising platforms, data monetization, and optimization pods can see a lift of 2x-3x on an always-on basis after year one of full mobilization and sales. Telcos need to act now to create a new customer-centric business that helps them compete more effectively and win today’s and tomorrow’s customers.