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Telecom carriers well placed to win ad revenue

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Telecom carriers around the world are turning their attention to advertising
as a potential source of revenue.

According to Gartner, the worldwide mobile advertising market alone will be
worth over $12-billion by 2011 but carriers are advised that they will need
to rise to some key challenges if they are to realise their advertising
ambitions.
"First and foremost, telecom carriers need to differentiate their approach
to the advertising market," says King-Yew Foong, research director at
Gartner. "This is particularly important, given the fact that advertising
money is being pursued by their immediate telecom competitors, consumer
device manufacturers such as Nokia, and internet-related companies like
Google, Yahoo, MySpace and Microsoft."
According to Foong, telecom carriers must take advantage of their access to
multiple delivery channels, including Short Message Service (SMS) Multimedia
Messaging Services (MMS) e-mail, fixed and mobile internet search
activities, location-based services and broadband/internet protocol TV
(IPTV) portals.
However, he warns that, while doing so, they will have to strike a balance
between their ambition to increase advertising revenue and the need to
control spam and user privacy.
If telecom carriers are to compete effectively for advertising revenue, they
must convince advertisers and marketers of the effectiveness and value of
their approach while distinguishing their value proposition from companies
such as Google, Yahoo, Microsoft and traditional media such as television
broadcasters and newspapers.
By developing the skills to enable them to do these things, telecom carriers
will also improve their understanding of the advertisers' perspective and
how to meet advertisers' requirements, such as audience validation.
Although carriers are not credible players at present, they have inherent
strengths that will enable them to fulfil their advertising ambitions. These
strengths include their relationships with customers, knowledge of local
markets, extensive customer databases, network control and multiple channel
access.
"If a carrier can execute its advertising strategy well and overcome the key
challenges, it could move quickly to reap the benefits," says Foong.
"Carriers can expect to become an integral part of consumers' lifestyles
when they can reliably deliver relevant advertisements to them. This will
require closer cooperation and partnerships with other businesses, such as
retailers, restaurants and cinemas."
Gartner advises telecom carriers to be persistent in their efforts and take
a long-term perspective if they are to seize the opportunities presented by
the growing online and mobile advertising sectors.
Carriers need to disrupt the current distribution of advertising money
between competing media channels and convince advertisers and marketers that
their various channels, customer knowledge, analytics and network control
features can reach the intended audience more effectively than traditional
channels.