Are Carriers Still Relevant? Yes And No


Credit: Corbis

A short, yet vibrant debate, kicked off this morning at a breakfast event in Seattle when a Microsoft (NSDQ: MSFT) employee stood up and asked a panel of startups, whether the carriers were still the ones in control in the mobile space.

Millennial Media’s CEO Paul Palmieri, who runs the largest independent ad network since Quattro and AdMob were scooped up by Apple (NSDQ: AAPL) and Google (NSDQ: GOOG), said: “It


Jon Frate

Paul Palmieri is wrong on so many levels.

1. Numerically he is wrong:

a. he claims to serve 10 billion ads a month, and only a few hundred million are from operators. So let’s say single digit %.

b. does that mean the carrier market place only represents single digit % of the total available ad impressions?

c. Clearly not. The carriers themselves serve 100’s of billions of ad impressions a month.

d. The set of impressions that Paul is tasting and sampling are only in ‘his universe’. And so yah, in his limited universe, operators are not relevant. Just like how in my limited universe, my chances of having sex with Brittney Spears are not relevant. Doesn’t mean Brittney doesn’t love me.

e. Paul’s ads are mostly CPC – cost per click. So he is serving 10 billion ads a month that nobody gets paid for UNLESS There’s a click. If a tree falls in the forest, does anybody hear? What if 10 billion trees a month fall in the forest?

f. Operators are more selective with their ad inventory. Why screw up a paying customer relationship unless it’s a guaranteed CPM paid inventory ad unit? ie. why chainsaw a tree down, unless you can be sure that somebody can hear it falling in the forest?

e. So yes, Paul’s rotten apples may be bigger than the operator’s fresh oranges, but which would you prefer to nibble in the morning?

2. Paul is wrong categorically

The companies he hypes and cites as examples of companies that demonstrate that operators are not relevant…where precisely do THEY get their traffic?

Yah you guessed it. Mostly they are buying traffic on operator portals and acquiring customers through that mechanism.

I’m sure if you called them up and said ‘hey would you like a deal with an operator portal’? the answer from all of them would be yes give me customers i’m sick of paying for traffic.

So in short, Paul is wrong categorically and numerically.

joel grossman

Of course, the walls of the walled garden aren’t as high as they used to be. Consumers can surf the web much more freely than a few years ago and download a wide array of applications. And the competition has been a great thing and led to buckets of innovation. Great for the entire industry.

That said, the carriers are tremendously relevant in other ways: they have very intimate relationships with the users and their handsets. Carriers have a trusted brand and powerful marketing channels (on most devices, including many Android devices) Carriers can bill users. Carriers can locate ALL phones (without any app running!). Carriers can provide powerful network controls. Carriers could know the real connections between people by analyzing calls and texts. Unlike some well-known social networks, carriers protect the privacy of their uesrs seriously and so have been overly cautious here. But what happens when the carriers provide tools that allow users to opt-in to the sharing of their location, or phone book, or call controls, or billing? Won’t that be immensely powerful? It would enable all kinds of services that we don’t even dream of today…

The smartest carriers are already partnering with aggregators to enable some of these for the most innovative developers. The ones who want to reach 100% of the market and who think beyond just the app store. It happened years ago with SMS Aggregators (which was the fuse that lit that market) and is happening today in Location with (shameless plug) Location Aggregators like Veriplace ( Today, with a single web services API, you can locate 150M devices using the carriers networks.

But of course, we have smart phone tools, too. And more coming soon :-)

This new world has forced the carriers’ hands so that they no longer slow the pace of innovation in the name of network reliability or privacy. But to call carriers irrelevant is to poke the sleeping lion or, more ironically, miss out on the next opportunity. If the carriers can manage to expose that network power by partnering with smart enablers to expose it in a secure yet open way that protects consumer privacy, they will be able to offer powerful tools that will EMPOWER the developer community instead of hindering it. We’ll all be thrilled at just how relevant they are.

Joel Grossman
VP Marketing and Product Management
WaveMarket, Inc

Geoff Morley, Blyk

I find it fascinating that the majority of people who answer this question think there’s only one game being played out. There are several different formats of marketing and advertising available on mobile, some of which carriers cannot hope to be major players in, others in which they very much appear to be in pole position.

Indeed why does the lead question have to be so black and white? The question should be “In what way are carriers still relevant?” Answer this with a balanced outlook and it’s clear they very much have a role to play. A collaborative approach to data usage, and direct, permission based consumer access are just two of the approaches more forward-thinking Operators are now taking in the Marketing and Content ecosystems. “Game over?” I don’t think so.

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