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Webinar - How to Unlock New Revenue Streams from Mobile Subscriber Data
- 1. Maurice Coyle Lorcan Jordan How to Unlock New Revenue Streams from Mobile Subscriber Data
- 2. • • • • •
- 3. Industry Trends: Growth & Decline
- 4. Source: Chetan Sharma Consulting, 2012
- 5. Source: Mobile Fourth Wave: The Evolution of the Next Trillion Dollars - Chetan Sharma, 2013
- 6. Source: Chetan Sharma Consulting, 2012
- 8. Source: Chetan Sharma, 2014
- 9. Strategies for an OTT World
- 10. • • •
- 11. • • •
- 12. • • •
- 13. The Problem with Mobile Customer Profiling
- 14. * Demographic / profile information of prepay customers, tends to be customer-provided & unreliable
- 15. •
- 19. •
- 20. Source: eMarketer, 2014 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Google Facebook Twitter Mobile Internet Ad Revenue Share, Worldwide 2012 2013 2014 $14.72 Bn $6.82 Bn $0.94
- 22. • • 1. http://www.heystaks.com/public-vs-private-parts-personas-sharing-on-the-recommendation-web/
- 23. * Demographic / profile information of prepay customers, tends to be customer-provided & unreliable Designer TravellerDeveloper
- 24. •
- 25. • • • •
- 26. Maurice Coyle Lorcan Jordan
Editor's Notes
- Hello everyone, we’re very glad you could make it to our webinar today. My name is Maurice Coyle and I’m CEO of HeyStaks Collaborative Search analytics. The purpose of today’s webinar is to discuss the existential threat facing today’s mobile operators and the need to uncover new revenue streams and enhance or protect existing sources of revenue. We’ll discuss a few ways in which mobile operators can do this by harnessing subscriber data usage patterns and have a discussion at the end about any other approaches that people are seeing.Before we begin, if anyone is experiencing difficulty either seeing my screen or with your audio, you can go to http://support.citrixonline.com/webinar and hopefully you can resolve your problem there.
- In today’s discussion, first we’ll take a look at some of the trends we’ve witnessed in recent years that affect mobile operators, gathering research from industry analysts and commentators to underscore the need for operators to uncover these new sources of revenue. We’ll detail some strategies that can be used by operators to adapt to the world of over-the-top, or OTT, players before discussion on how the user profiling that drives many of these strategies can benefit from a focus on intent when profiling customers.And we’ll round out the presentation part of this webinar with a brief glance at how HeyStaks can help with some of these issues before opening up the floor for questions.I’d also like to draw your attention to the poll which we’ve created and that will be available throughout this webinar, that asks our attendees about their current use of subscriber data to deliver enhanced experiences.To answer the poll at any time, just select the poll name from the Polls section on the right-hand side and submit your answer.Ok, let’s get started.
- Let’s take a look at some of the dynamics that affect mobile operators today, specifically regarding traditional sources of revenue.
- To consider the growth or maturity of a market, it can be helpful to use a sigmoid curve, or “s” curve. These show the growth of a market, from slow early growth, through critical mass and on to plateau or flattening, followed by decline. In these examples from Chetan Sharma Consulting, signmoid curves chart net revenue as a function of market penetration. The graphs shown here depict the growth stage of 2 traditional mainstays of mobile operator revenue, voice and messaging, in relation to particular territories. As you can see, in many countries where subscriber penetration is high, revenue growth has plateaued and is beginning to decline in many cases. __________________After a period of slow growth, the market achieves critical mass and grows rapidly. Once market saturation is approached, growth of the market plateaus and slows down and ultimately begins to decline. There are many factors that affect the timing and speed of market growth and decline, dependent on the individual territories and providers.
- Provision of data access, on the other hand, is in a much earlier stage of revenue growth, only having started to grow rapidly when iPhones and Android smartphones achieved widespread adoption and network speeds accelerated greatly from 2009 onwards.Data access will be an important part of the revenue profile for mobile operators in coming years and there is a significant opportunity for growth, particularly as demand for higher speeds and guaranteed quality of service grows. While data access revenues have compensated for declining voice and messaging revenues to date, they are increasingly being commoditized through Regulation & Competition and margins are rapidly shrinking so data access is not a reliable long-term source of revenue. These 3 curves of voice, messaging and data access constitute most of what generates revenues for mobile operators today, but it is a 4th wave that will define survival and success in the coming years._______Vodafone Italy, Data Access margins declined for the 1st time in FY 2013
- That wave is, of course, digital value-added services (or VAS), frequently delivered by over-the-top (or OTT) providers.While strategies for mobile operators in voice, messaging and data access require a combination of delaying decline and extending the peak of revenue growth, it is in the 4th wave where true future potential lies. Operators need to move up the value chain in digital service provision in order to realise their potential.
- Here we see some of the application areas that constitute the OTT / VAS landscape. Particularly striking here is the dominance of the largest Internet companies , and while operators have opportunities for differentiation in many of these areas it may be difficult to unseat the incumbents. And of course many of these providers have offerings such as voice over IP and messaging services that directly contribute to the decline of traditional operator revenues. We will see later how operators can leverage their direct relationship with their customers to participate in the significant revenue opportunities created by the digital age of mobile.
- Juniper have predicted a profit tsunami for Mobile Operators, where the costs to run a mobile network would exceed revenues by 2015, unless the Mobile Operator finds new sources of sustainable value-added services revenue.
- And as we might expect, the OTT opportunities are greatest in more developed markets where other revenues are either declining or more mature.http://www.slideshare.net/chetansharma/2014-mobile-industrypredictionssurvey
- Next we will take a look at how operators can approach the 4th wave and participate in the revenue opportunity it creates.
- There are different levels for operators to participate in the digital solutions ecosystem:For operators who simply provide data access, upon which mobile operators build their services, the future is not bright. Although as mentioned, data revenues may continue to grow, as time goes on margins will erode as a result of commoditisation and long-term viability is unlikely.Operators may also enable OTT providers, by providing them with the robust infrastructure required to run their services and making user data that drives their business models available.The most successful operators will be able to utilise their position and assets to create experiences for their customers that OTT providers can’t provide. Using their direct relationship with customers is key to this transition.
- Many attempts have already been made to combat the OTT threat, including blocking access to these data-hungry apps. This requires all operators to co-operate and is currently the subject of legal discussion in the form of the net neutrality movement. Operators have released their own OTT apps with limited success, with the Rich Communications Service, aka Joyn, arriving too late to dislodge the messaging apps that had already achieved traction. The OTT space is crowded with not just a few competitors as would be the norm for operators, but rather dozens of hungry, nimble Internet companies deploying proven business models faster than operators can launch their own initiatives.Related to our first point, there is a growing call for high-quality services, with HD voice being offered by some operators for example – this is again subject to some debate with regard to net neutrality, though it is likely to yield benefits in the future._______ Blocking OTT providersLegal issues, i.e. net neutrality, and requires all operators to co-operateRelease own OTT appsRCS/Joyn lacking traction & Tu Me failure with competitions from many nimble OTT competitors operating proven Internet Business ModelsRevenue-Share Partners with OTT providersOne API (charging access to Mobile Operator products, profiles & services)Direct Carrier Billing (Apps and OTT Mobile Services)Charge Premium Access with Focus on quality RCS, HD Voice, tiered pricing
- Some of the more promising approaches have involved partnering with OTT providers, a notable example being Netflix and service provider Comcast partnering to ensure quality of service for Netflix customers. On the customer side, operators and service providers can offer app-based pricing so customers pay for the apps they use the most. In both of these examples, it is necessary to profile users, in the first instance to understand the value that the operator brings, and in the second instance to understand what type of traffic and apps each customer prefers, and monitoring those. Finally, the most important asset that mobile operators have is their direct billing relationship with their customers that enables operators to learn about their customers’ needs & wants and deliver precision marketing and targetted advertising initiatives that improve the overall customer experience.We will now take a deeper look at the opportunity mobile operators have in profiling the interests of their customer base. _______________________Partnering with OTT providersE.g. Netflix / Comcast Requires accurate profiling of app usage, insight into value service provider bringsApp-based pricingNeed to understand which apps / type of traffic customers are usingLeverage direct relationship as differentiator to add valuePrecision marketing, targetted advertisingNeed to know needs & wants of each customer
- As the world goes mobile and marketing & advertising dollars follow user attention, it is incredibly difficult to create accurate or useful profiles of mobile users today.
- For the most part, while operators may have a direct billing relationship with their customers, the actual data they know about them is very granular and limited to fields like device, spend, location and possibly some limited demographic information. For prepaid customers, quite often even demographic information is self-supplied and inaccurate, making it difficult to rely on.
- It is very difficult to create targetted campaigns using this data. For instance, using this sample campaign manager interface it is impossible to create a segment of expectant parents for someone selling pushchairs. Gender has poor resolving power in this regard, yet it is probably the most useful dimension available here.
- As a result, while advertising activities such as paid clicks are growing, the value of resulting campaigns is poor, overall spend is low and performance has yet to approach that seen in desktop environments. http://www.thewire.com/technology/2013/07/optimists-take-googles-shrinking-ad-price-problem/67366/
- There are many elements to consider when profiling customers for the purposes of marketing and advertising, and one that is of particular importance in mobile environments is intent.
- There’s a very good reason why Google enjoys such a dominant position in digital advertising and that is because it delivers ads on its result pages exactly when you have expressed an intent in the topic the ad pertains to. Another name for advertising around intent is “demand fulfilment” and it attracts most advertising dollars because people can be targetted just when they’re ready to buy, which means they are far more likely to convert on an ad that matchesd their intent.
- And as mentioned, in mobile environments where people are on the go and intent expressed via their smartphones is even more closely tied to what they are looking for right now, the importance of intent awareness is even greater. Indeed, when Facebook began monetising their mobile news feed with sponsored posts, the positive response and resulting leap in both revenues and stock price was directly due to their launch of Facebook Exchange, which lets intent-oriented companies like Chango to facilitate targeting of ads at users based on current or recent intent. - Especially when they added intent data via search retargeting companies
- And while Google and Facebook garner the vast majority of mobile revenues, it should be also noted that Twitter have recently begun experimenting with keyword-based ad targetting, another intent-driven initiative that is seeing them begin to play a bigger part in the mobile advertising ecosystem.
- This is where a significant opportunity exists for mobile operators to harness the vast amount of data usage engaged in by their subscribers and tap into the potential that they uniquely possess for delivering an improved view of their customers’ interests.
- We have seen how intent is powerful and timely information to have access to, and also how search is a rich source of intent. By analysing the activity of subscribers as they search across the Web, it is possible to create much richer profiles of not just customer interest, but customers’ current intent. It is also possible to perform this analysis anonymously and in a way that protects customer identities and respects their privacy.
- The granular, often inaccurate profile data currently held by mobile operators on their customers can thereby be transformed into a rich picture of their current interests and intent, which can be used in many ways.
- For example, it is now possible for the pushchair vendor mentioned earlier to create a much more targetted audience segment, by specifying specific interests and anonymously identifying customers who have expressed those intents in the recent past. When targetting is more accurate, click-throughs and conversions increase, as does campaign return-on-investment and the entire advertising ecosystem increases in value. Of course, advertising is just one way in which these intent-rich profiles may be used. Many other applications such as precision marketing are possible, and mobile operators can play a greater role in the OTT ecosystem through partnering with providers for whom knowledge of intent is of use.
- So to finish the presentation portion of this webinar, a quick summary.We have seen how with traditional revenues source under pressure, OTT and VAS represent both threat and opportunity for mobile operators, since significant and sustainable revenues will be unlocked from these areas and operators are well-positioned to participate if they can alter their mindset sufficiently to become digital solutions providers.We examined some strategies for managing this dual threat and opportunity, and saw how deeper knowledge of customer interests and activity contribute to successful outcomes.Finally, we outlined one way in which accurate customer profiling can enable mobile operators to participate in the lucrative mobile advertising space, and to realise some of the untapped potential in the vast amounts of data access that they facilitate every day.
- Thank you to everyone for your attention, we hope you found value in today’s presentation and if you want to learn more about how HeyStaks can help you to derive value from data, please contact us at the email addresses listed I’d be delighted to take questions from anybody who has them now.