Facebook, Telcos, need to Find their Identity

Written by on August 14, 2012 in BillingViews, Opinion with 0 Comments

As the sale of smartphones passes the sale of PCs and the world goes mobile at ever greater rates, the fate of Facebook and Telcos is hanging in the balance. Half of Facebook’s users – some 488 million people – access the site via mobile and over 100 million have ‘mobile only’ accounts. The easy answer to the question is ‘through advertising.’ The click through rates are 14 times higher on a mobile and it is becoming clear that Big Brands are going to ‘save’ SMS because of the precision marketing potential. However, it is easy to write articles and make presentations about the potential – both creative and commercial – of mobile advertising. But, it is not that easy. There is trouble ahead.

The revenue per click is dropping quickly, down 16 percent since last year and as the mobile advertising business is built on scale which is expensive to fund, there is a danger that the pursuit of revenue is at the cost of profit. New models need to be explored, and Facebook is certainly doing that. Sponsored stories are generating $1 million a day and half of that comes from those mobile accounts. However, there are ethical issues around sponsoring stories, should you make money out of the your customers like that and the ‘like’ model itself is coming under scrutiny. One company found that 80 percent of the ‘likes’ for its campaign were produced by bots, another that the majority of ‘likes’ came from Nigeria, for no rational reason.

Facebook is still experimenting and is unlikely to give up. The latest model is a ‘pay per download’ version, which commercializes the value at the ‘point of action’, rather than the vaguer ‘point of unknown interest.’

There is another angle to this. As security and protection become ever greater issues, someone should take the lead in leveraging this. As Ed Finegold says in his recent BillingViews article, (BV: Can Telcos Monetize Trust), if half of Facebook’s users access the site via mobile then the way back into the value chain for telcos is providing trusted access, not just access. This may be risky, but the alternative – doing nothing in this age of the OTT Games – may be much more risky.

Taking this a step further, there is another idea to consider. As mobile networks incorporate more and more WiFi into their portfolios, the information that underpins the ‘relevance’ that is vital to effective mobile advertising is obscured. Enter Facebook, in partnership with the Trusted Telco Access strategy and the information that Facebook’s own users have posted provides the relevance that is the key to mobile marketing success.

Another emerging area for adoption by our Trusted Telco is identity. Again, Facebook is experimenting, this time with FaceDeals, where deals can be linked to your profile and personalized by a store or a bar. Identity is something that we take for granted and something that is not what it seems. As Dave Birch points out in a very good TED lecture, identity is not about your details, it exists to tell people that you are allowed to do what you are asking to do. It should be like Doctor Who’s psychic paper (says Birch). It is your permission slip – and should be provided by [insert name of service provider].

 

 

 

About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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