May the Best Telco Win: How T-Mobile and Sprint Could Change the Game

By Sigvart Voss Eriksen, CEO of Tapad -- Consolidation has been a common theme in 2017, with companies across the advertising, publishing and telecommunications fields coming together to create industry behemoths. While these mergers aim to create new, combined capabilities, they also create a massive volume of resources to sift through and pull from. Among these resources some, like consumer data — the golden advertising ticket — are priceless. With a possible T-Mobile/Sprint merger on the horizon, it’s important to consider the implications this move might have on both the telecommunications marketplace and the future of the martech industry.

A successful merger between the third and fourth largest telco players would make the new company only 14 million subscribers short of being number two in the country. In the case of a combined T-Mobile/Sprint entity, you would now have three operators – almost equal in size, but each with very different strategies – competing alongside each other. This heightened industry competition among the top players could trigger an aggressive marketing battle for the top spot.

Verizon and AT&T have each tried to diversify through the acquisition of AOL and Yahoo!, respectively, to create new revenue streams through digital advertising innovations. Both of these telcos are trying to monetize their data through advertising with different strategies, whereas T-Mobile is more focused on using its data for its marketing and CRM purposes in combination with its ad tech partners. Should this merger unfold, it will be interesting to watch whether T-Mobile/Sprint will utilize its data similar to Verizon and AT&T and focus on developing unique content versus remaining focused on current offerings. However, with T-mobile in the lead, it is likely they will pursue their own path.

Telco data is deterministic and a very robust tool for understanding consumer demographics, behavior and location. This opens the way up for personalized marketing on a very granular level. For CRM purposes, telcos around the world are becoming ever more sophisticated at using their data for churn prediction, life cycle modeling, cross-selling, up-selling, etc. The urgency to adopt Big Data capabilities has opened up new possibilities to process and use the wealth of data that a telco possesses. Telcos with excellent analytical and execution capabilities can now take personalization of offers and 1:1 marketing to new heights.

Historically, modeling on telco data would be limited to the market share of the operator and activating data for use cases outside traditional CRM is marred with privacy concerns. However, combining data with a probabilistic view of consumers can help overcome these limitations. With an encrypted identity link, data can be anonymized for use outside the telco’s own domain. This unlocks the opportunity to create even more robust and dynamic audiences at scale covering the whole market. The power of the operator’s’ CRM data can be unlocked to drive personalized acquisition use cases at scale in a privacy-safe manner.

The combination of first-party and third-party data for real-time activation in the ad tech ecosystem is opening up a new distribution channel for telco marketers, in particular. In some international markets that employ these techniques, online sales are far surpassing traditional in-store sales in efficiency and volume and are outperforming traditional digital marketing by a factor of two to one. The next reality for telcos is the implementation of AI and machine learning capabilities. While many are still far from that reality, the industry understands the necessity of this technology as the future of digital marketing continues to evolve. The combination of machine learning algorithms and multiple offers that can be placed in real time based on consumers’ preferences, increases the relevancy of the ad to a customer manifold. In turn, serving better, more brand-safe advertising to all consumers regardless of industry.

Three different operators vying for first place will certainly be exciting to witness. With dramatically different strategies for monetizing and using their wealth of data, it will be interesting to see who comes out on top. The only certainty is this: The one who “wins” will be whoever can capitalize best on the massive wealth of data available to them.

(Originally featured in RCR Wireless)