The Telcos Just Strengthened Their Arsenal In The Fight For Brand Advertising Dollars

And in light of AT&T’s recently approved takeover of Time Warner, its subsequent acquisition of AppNexus, Verizon’s continued investment in Oath, Comcast’s expansion of Freewheel and its bid for 21^stCentury Fox, the position of the telcos in this fight has never been so strong.

‘You will’

Like the walled gardens and the OTT giants, the telcos want to combine the power of premium, brand-safe inventory with rigorous targeting capabilities that work seamlessly across multiple devices. That’s what it’s going to take to emerge victorious.

What’s most remarkable about the telcos and networks is that they seem to have known this would be the endgame all along. Way back in 1993, AT&T gave us a glimpse into its crystal ball with its shockingly insightful “You Will” campaign, directed by David Fincher.

Forecasting the development of everything from intelligent digital personal assistants to video on demand, the campaign featured lines such as, “Have you ever had an assistant who lived in your computer? You will.” And, “Have you ever watched the movie you wanted to, when you wanted to? You will.”

The telcos, for all the ribbing they take when a scrappy startup disrupts them in some way, have always had their eyes on the long game. In fact, had AT&T rolled out a B2B version of its “You Will” campaign, it very well may have asked, “Do you want to seamlessly target and advertise to audiences across TV, social and digital? You will.” 

AT&T, Verizon and Comcast are uniquely positioned in the media landscape today to dominate the future of brand advertising. They have the trifecta – the technology, content and ad tech –required to create the seamless offering that could genuinely attract the brand advertising budgets that are currently in play.

And here’s the kicker: For these companies, winning those brand advertising budgets is only part of the strategy in play here. What this is all really about is maintaining brand loyalty – and monthly contracts – with their customers.

The long game extends beyond advertising

The wireless market, long one of the most competitive industries on the planet, is at last reaching a subscription saturation point. With mobile phone penetration plateauing in the US, the telcos and networks are seeking a new source of growth and revenue in the form of advertising budgets.

But more importantly, they’re looking to hold onto what is already a very lucrative asset: their subscriber bases. One way to do that is to foster tremendous loyalty among consumers by also becoming the biggest names in media and entertainment.

If you want further evidence of the importance of brand loyalty for the telcos and networks, consider the now full-circle evolution that we’ve seen in the unlimited data model. Once-unlimited plans were capped following the rise of major streaming services on mobile, as the Netflixes and Hulus of the world put unbearable strain on the mobile networks, and the end of net neutrality cleared the way for telcos to prioritize their own content over that of OTT services.

Now, following deep network investments and a return to the consumer expectation of unlimited data plans, the telcos and networks are looking to get a piece of the experiences that they enable. The overage fees that underwrote their network improvements have vanished, and there’s a deep need to capitalize on those investments. In this regard, it’s less about grabbing advertising budgets and more about ownership of the customer relationship for the long term. The telcos are looking to take those relationships out of the hands of the walled gardens and content providers.

Furthermore, AT&T, Comcast and Verizon are investing heavily in building out their own full advertising stacks. Could they easily build these through partnerships? Sure. And Google, Facebook and even Amazon would no doubt love to be their technology partners in that sense.

But the telcos seem to have wisely noted the cautionary tale of Netflix and the TV industry. When Netflix initially came knocking, it offered the beleaguered TV world a new revenue stream at a time when a new revenue stream was much needed. And in the blink of an eye, Netflix became one of the biggest competitors the TV world ever could have imagined.

In the battle for the future of brand dollars, the telcos and networks have one thing that none of the other contenders have: decades of experience in adapting to industry disruption. They’re playing the long game – one that extends through the next phase of ad monetization and beyond it, to the long-term value of customer relationships.

With the passing of the AT&T/Time Warner deal, AT&T’s acquisition of AppNexus, plus the continued push of Verizon and Comcast into content and ad tech, these supermajors in the US have built an impressive arsenal with which to defend their vision.

Follow Lance Neuhauser (@LanceNeuhauser), 4C (@4Cinsights) and AdExchanger (@adexchanger) on Twitter.

This post was syndicated from Ad Exchanger.