Mobile variety is in short supply for marketers. With the duopoly maintaining near-total dominance, alternative ad-tech players struggle to break through. This means media buying is often limited to Google or Facebook.
The most viable contender thus far has been Amazon, a potential third titan in the making. But another challenge is emerging that may bring greater choice: mobile network operators (MNOs).
With vast user data at their disposal, MNOs are being hailed as the sleeping giants of ad tech that represent a new hope for industry diversity. And it’s one that’s growing quickly: The last 18 months have seen two forays from Verizon (now Oath) and AT&T into ad tech.
So what could MNO deposition of the duopoly do for marketers?
Let’s first assess the current situation. The more ad spend goes to Google and Facebook—84 percent globally in 2017—the harder it is for independent vendors to stay afloat and the narrower advertising options become for marketers. Additionally, other ad-tech companies are hampered by low availability of new user data, publishers and in-app sources. And with most using the same insight and inventory, ads are becoming repetitive and ineffectual.
The upshot: Marketers might soon have no choice at all.
MNOs can solve this issue by giving alternative providers a boost. Through MNO partnerships, vendors gain the muscle needed to rival the duopoly and broaden digital advertising scope for marketers.
The key components of this muscle are scale and resources. MNOs not only have access to large audiences in the desirable mobile environment, where U.S. users spend five hours of their day, but they also possess plentiful first-party data and funds. The data is especially critical, containing granular insight into in-app and browser interactions and location. When combined with smart ad-tech capabilities, this data can fuel better audience segmentation and hyper-personalized targeting in real time and at scale. In short, the union of MNOs and ad tech platforms can offer high-quality advertising that equals the duopoly.
Incidentally, this route also helps marketers harness the best of programmatic and walled gardens. To date, marketers have had to decide between core objectives: sites such as Facebook provide smart targeting and scale but little transparency while programmatic offers high transparency and extensive targeting capabilities, but only if you’re prepared to pay a premium price. Plus the ecosystem remains fragmented as brands need to partner with numerous players to achieve success across the media mix. When it comes to MNOs, however, once they’re united with impartial vendors, they make it possible for marketers to buy tailored placements based on authenticated data in the open ecosystem. They know who they are buying from and where ads will be placed, which also reduces fraud, plus first-party data boosts targeting precision.
The convergence of MNOs and ad-tech companies is still relatively nascent. A recent McKinsey report shows 41 percent of the companies it has identified as beginning to monetize their data, including telecoms firms, only started doing so in the last few years.
For marketers, the next step is clear: They need to stimulate further development by voting with their budgets. As the central buyers all media companies compete to supply, marketers have a significant and underutilized ability to transform the balance of power in digital advertising. By directing a greater portion of spend at independent platforms affiliated with MNOs, they can create demand that fuels more partnerships. Not to mention reducing the influence of the duopoly and making more space for competitors to flourish.
Of course, the evolution of this market must be carefully managed. For instance, marketers will need to be discerning, opting only to buy from MNO-vendor alliances that comply with data regulations, particularly in regard to consumer privacy, and implement robust brand safety measures to guard against inappropriate placements and inferences from bad actors.
Nevertheless, there’s no doubt that a change is needed. If the industry continues on its current course, marketers are on a one-way trip to ever-decreasing advertising choice, with media diversity stifled by the duopoly’s iron grip on ad dollars. This makes it essential for the industry as a whole to recognize the opportunity MNO and ad-tech coalitions present and support their growth. Doing so will not only expand the horizons of the open ecosystem, but also enable varied and engaging mobile ads that produce better results for marketers.
