An untapped mobile advertising channel: What opportunities do OEMs and MNOs offer?

If you’re a mobile advertiser, you can’t afford to ignore the exciting opportunities Original Equipment Manufacturers (OEMs) and Mobile Network Operators (MNOs) are presenting.

With demand for mobile campaigns on the rise, there is a danger that existing touchpoints are being overused and will become less effective. Successfully engaging users requires doing something new as the battle to capture their attention is now a difficult one to win.

The potential of OEMs and MNOs as an advertising channel for mobile app marketers is massive – yet it’s still being overlooked by a lot of players.

We recently sat down with Carlos Rodrigues, Director and Operating Committee member at Match-Maker Ventures, to get his take on this hot topic and what it means for the industry.

Carlos, why do you think advertisers are not fully utilizing OEMs and MNOs as a channel yet?

That’s a very good question. Some collaborations are already ongoing but there is definitely room for improvement. When you see giant brands like Procter & Gamble and Unilever cutting down their digital ad budget to decrease marketing wastage, that means something must be wrong within the advertising supply chain. In fact, there is still a lack of transparency that opens up room for fraud in the digital ad space. To name just a few issues, many ads are not viewable, served to bots, or even adjacent to inappropriate content. Therefore, brands are actively looking for better alternatives to effectively reach their target customers.

Cleaner inventory and improved targeting are key to driving marketing ROIs. That’s where OEMs and MNOs come into play and leverage their unique assets – smartphone access and rich customer data. They have the means to explore this market gap, they just need to partner with the right ad tech players. Collaborations, while still at an early stage, are already ongoing and will most likely pick up rapidly over the coming years. Advertisers are keen to work with MNOs and OEMs – now it’s time for those sleeping giants to up their game, find the right partners, and build up a solid value proposition.

Looking at telcos specifically, what do you see as the main benefits for them as an advertising channel?

As the telecom industry faces a significant digital transformation, mobile operators are actively looking for new technologies and business models to generate new revenue streams. The digital advertising industry is definitely one that can help to drive top line growth. Digital ad spend is outpacing traditional advertising channels and mobile is the fastest growing sub channel. We are talking about a multibillion dollar global industry. Even if telcos just get 1% out of the pie, which is quite conservative, it’s already a significant opportunity.

For example, the app install advertising market should be under the radar of every single MNO. Mobile app developers are paying significant amounts to promote their apps and acquire new customers. Whenever a consumer buys a new smartphone that comes with a couple of third party apps pre-installed, it’s most likely someone else is profiting from the moment those apps are opened.

Now, most MNOs sell plenty of smartphones every year, but how many are profiting from pre-installed apps? Probably not that many, but the ones who are, are profiting big time. This is just one example of a highly scalable business model in the ad space. Many others can be explored.

So what’s the challenge?

Naturally, some challenges arise when tapping into a new market. Advertising is not an exception, particularly as it involves the sensitive topic of customer data, which has been under the spotlight this year due to the General Data Protection Regulation (GDPR). I personally see it as an opportunity rather than a challenge. Provided that telcos have a clearly defined and properly communicated strategy, GDPR will enable them to serve their customers’ interests even better. For example, when I land in a new country I’m interested to know which apps are available to order a car ride from the airport. Or, when my telco contract ends next month I would like to know if there is a special discount to renew it. What I mean is that mobile advertising represents a win-win-win opportunity if done right. The customer wins, the advertiser wins, and the telco wins.

How can the hurdles be overcome?

Managing the technical and commercial sides of an advertising solution simultaneously is probably the single biggest challenge for mobile operators. Doing it all by themselves is risky, as it requires significant investment – both in capital expenditure and operational expenditure – and it requires significant time until the revenues come in. Therefore, I truly believe that collaborating with experienced ad tech players is the way to go. Particularly with companies that not only provide innovative technologies, but who are also able to bring advertising demand to the table.

A company like Glispa masters both aspects. On one hand, Glispa Discover’s platform and underlying technology enable various new business models for MNOs and OEMs. On the other hand, Glispa’s proven track record in the mobile ad space and its numerous partner brands ensure all the necessary advertising demand year-round. The value proposition gets even more interesting, as Glispa is also using its ad tech expertise to help MNOs to better manage their own marketing needs through its Discover platform.

With an extensive portfolio of innovative tech companies and based in Vienna, Match-Maker Ventures focuses on driving collaboration for startups and corporations. Carlos was speaking to Mark Bell, Glispa’s Senior Content Marketing Manager, and would like to give a special thanks to his colleague Anastasia Rastorgina for her support with the interview.