Average ad revenue in the US per subscriber per year will be…. tada: $4.86. And that’s in 2013. So even if Carriers would get 100% of this – which they won’t – 40 cents per month additional revenue is not really the biggest opportunity. But there’s more to the game.
he latest research for 2013 suggests about $1,500M in U.S. mobile ad revenue:
| U.S. mobile users (million) | 308.7 | eMarketer |
| U.S. mobile ad revenues (millions) | $ 1,500.00 | Parks Associates |
| U.S. mobile local ad revenues (millions) | $ 800.00 | BIA/Kelsey Group |
A simple average might not show the whole picture, so here are some ideas – of course based on the absurd idea that mobile carriers would get 100% of this mobile advertisement revenue:
| per year | per month | |
| Average ad revenue per user | $ 4.86 | $ 0.40 |
| If top 20% account for 80% of revenues | $ 19.44 | $ 1.62 |
| if top 40% account for 80% of revenues | $ 9.72 | $ 0.81 |
So even if the top four carriers in the U.S. could realize these revenues right now, their revenue potential would look bleak compared to the current wins in App Stores, Machine-to-Machine (M2M), and voice and email services:
| Verizon Wireless |
AT&T Mobility |
Sprint Nextel |
T-Mobile U.S. |
|
| 89.7 | 79.6 | 48.8 | 33.5 | Number of subscribers (millions) |
| $ 58,600.00 | $ 42,700.00 | $ 35,640.00 | $ 17,000.00 | Revenues 2008 (millions) |
| $ 653.29 | $ 536.43 | $ 730.33 | $ 507.46 | average revenue per subscriber per year |
| $ 36.32 | $ 32.23 | $ 19.76 | $ 13.56 | Revenue increase through mobile ads (millions) |
| 0.06% | 0.08% | 0.06% | 0.08% | revenue increase through mobile ads (%) |
’m not saying that mobile advertisement per se is not a big opportunity for other players, as current application platforms level the playing field for smaller players such as myself. I also wouldn’t mind getting 0.1% of this revenue with a simple ad-sponsored application in addition to other business models. I also think that there are a lot of cool applications out there that I really like and would like to see growing. But for carriers simply selling one $0.99 application through existing application stores per month just to power users would outdo these numbers by far – and not only in 2013, but right now.
The bigger opportunity is of course the ecosystem around advertisement revenues, such as targeted advertisement platforms, peering (anonymized) information to data miners, adding converged solutions for other carrier channels that are more profitable, or managing spending behavior of subscribers (earn on the product advertised, not the advertisement). That again requires complex new platforms, billing and charging mechanisms, and has to satisfy regulatory and legal authorities. As these are still missing – or delayed in favor of other more revenue driving services – carriers have little incentive to invest into “innovative” fads.
Some Silicon Valley research clarified the question why two tier 1 carrier’s advertisement department and content delivery network department were clashing with their revenues (from ads) and costs (from transport and content management).
Cable is everything but boring. While Web2.0 and Telco2.0 gets all the attention right now, a quiet revolution is taking place in the cable industry. And I’m talking big bucks product, service, and technology innovations.
An excellent (German) article by BITKOM summarizes business challenges, decision points, and business models of cloud-based solutions. BITKOM segments the “Cloud” space into Software, Platforms, and Infrastructure. While this is all true and good for current business, the Cloud stack looks more like Information, Relationships, Services, Platforms, Infrastructure, and Networks.
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