Here Comes the Telco Ad Stack War
Verizon Wireless’ purchase, or merger, with AOL stands out as one of the ad tech stories of 2015. This is not only for its multi-billion price-tag, but also how it symbolises the attempted re-emergence of telco operators in the digital advertising game; which is valued at $600bn per year. ExchangeWire analyses how the worlds of telecomsand ad tech are starting to collide; as well as previewing some of the conflicts this may cause, as advertisers look to take their campaigns across screens.
Earlier this month, Verizon Wireless recently confirmed it is to pay $4.4bn in a ‘merger’ with AOL, meaning it will acquire the ad tech firm’s various assets, including: its dial-up internet business and premium content brands, such as Huffington Post; but, most importantly, its ad tech suite, which includes its One by AOL, Adap.tv. The telecoms operator aims to challenge Facebook and Google’s near stranglehold on the mobile advertising market.
After the conclusion of the deal, which still has to be approved by regulators, AOL will become a wholly-owned subsidiary of Verizon Wireless. This will put the operator on the front foot when it comes to selling mobile advertising services in competition with established internet players, such as Facebook and Google – which are credited as tying up 75% of the entire market between themselves.
In addition, it will also fend-off the dreaded ‘dumb pipe’ scenario, where mobile operators are effectively unable to monetise their networks, while online advertising companies making increasing gains on the back of them. The key opportunity being the possibility to monetise both its extensive first-party customer data, plus its control over their devices.
The move comes amid great consolidation in the UK telecoms operator space – which in turn reflects the wider global telco market, as the market is largely controlled by multinational operator groups – as BT attempts to buy EE, the UK’s biggest carrier by subscriber number, plus O2 UK, a subsidiary of Spain-based Telefonica, under offer by 3-owner, Hutchison Whampoa.
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