Telefónica’s advertising chief is on a mission to boost the amount of revenue the operator makes from selling customer data to big business.
Dan Rosen, who was appointed as Telefónica’s Global Director of Advertising last September, told European Communication that he sees “a great opportunity to make customer data available to brands”.
It is a refreshingly honest view from the former WPP executive when set against the wider industry’s fear of doing anything that might impinge on what it regards as a sacred bond of trust between customers and operators.
Speaking at Mobile World Congress in Barcelona, Rosen said having verifiable location data put Telefónica in “a unique, strong position” in the advertising space.
He cited work the operator has done with ice cream brand Ben & Jerry’s in Germany as an example. The Unilever-owned company wanted to notify people when a tour they were doing around the country to promote the brand arrived in their local town. Working with Telefónica, they targeted specific people in specific towns who had opted in and sent them an SMS.
Rosen said the initiative won several awards. He added: “Advertisers are starting to see location and sensors as a core targeting criteria.”
As a result, companies are spending money on buying specific audiences rather than specific channels – TV, radio, magazines, etc – to advertise their wares to. “It’s all about sending the right content to right audience in the right place,” Rosen explains.
Telefónica is committed to making sure it gets its share of this emerging market. Before Rosen’s appointment, it teamed up with private equity firm Blackstone to launch the first mobile ad exchange platform owned and powered by an operator.
Telefónica won’t share how much money it is making from its foray into advertising, but Rosen says year-on-year revenue growth is “well into double digits”.
He adds: “We believe we are ahead of industry growth, which is how we measure ourselves.”
But there are clear challenges to overcome. Rosen says: “[The amount of] advertising dollars going into mobile are not where they should be.
“It’s not entirely clear why more ad dollars not moving over to us when you look at estimates that say between 12-25 percent of people’s time is spent looking at a mobile screen.”
When pushed, he says brands struggle to see an RoI and measurability is problematic when compared to more traditional advertising channels.
“[Advertisers] are starting to experiment and we fall within experimental budgets,” he adds.
Rosen also thinks a lack of understanding about what mobile advertising can deliver as well as a paucity of “mobile natives” in creative agencies is holding the sector back.
On the latter point, Telefónica’s reliance on SMS as a delivery tool hardly demonstrates cutting edge technology.
Rosen describes SMS as “functional” and “does a job” but says what the operator is doing at the back end in terms of data mining and segmentation is where the innovation really lies.
He adds: “Next year I will able to talk to more visually vibrant vehicles to deliver [advertising]. We’ll be launching products later this year.”