Back around 2015 through early 2018, telcos were very excited about ad tech.
They spent billions of dollars betting that they could monetize their rich subscriber data and compete with the walled gardens by acquiring ad tech assets of their own.
The deals just kept piling up.
- Verizon shelled out a combined $9 billion to acquire AOL and then Yahoo and merged them into a digital media subsidiary called Oath.
- AT&T bought AppNexus for $1.6 billion and formed Xandr by merging its ad sales, addressable TV and data analytics units to create a full-stack ad tech platform.
- Singaporean telco Singtel went nuts and bought five ad tech companies in less than five years: mobile-focused ad platform Amobee and then (via Amobee) digital ad network Adconion, native advertising startup Kontera, DSP Turn and video platform Videology.
- Spanish carrier Telefonica launched its own mobile ad exchange.
- Norwegian telco Telenor acquired cross-device provider Tapad.
- Cable operator Altice bought video ad platform Teads.
- And T-Mobile bought rideshare video/digital OOH ad network Octopus Interactive followed by location data platform Blis and programmatic DOOH platform Vistar Media.
It was a mini gold rush.
Boom, bust, reboot
But the enthusiasm was short-lived. Most telcos – with the exception of T-Mobile – rapidly lost their appetite for ad tech.
The hoped-for synergies never materialized, and the higher-ups at carriers wondered why they were exposing themselves to potential privacy issues when advertising was a rounding error compared to the hundreds of billions they make every year from their connectivity and subscription services.
And so: Oath was rebranded and sold off in pieces. AT&T sold Xandr to Microsoft after integration failures, privacy issues and underperformance. Telenor sold Tapad to Experian at a loss. Altice sold Teads to Outbrain. Singtel offloaded Amobee and its patchwork of other ad tech assets to Tremor International for a fraction of the original deal price. Axonix never gained meaningful traction or scale, and Telefónica sold its stake to Blackstone after years of losses.
Nearly a decade later, however, the idea hasn’t gone away. If anything, it’s resurfaced, this time in new markets, under stricter privacy regimes and using a different playbook.
One example of this new approach comes from Novatiq (formerly Smartpipe), a UK-based tech platform that helps telcos turn their subscriber data into privacy-safe digital IDs using consented signals from carriers to target ads without sending personal information outside of the network.
Most of Novatiq’s clients are based in the Middle East, Africa and Eastern Europe, where carriers tend to be more open to new approaches for data monetization than in the US market, where operators remain cautious.
There are two main reasons for that skittishness, said Tanya Field, co-founder and chief product officer of Novatiq.
One, US carriers are a “bit jaded from their previous experiences,” Field said. “They spent an awful lot of money and they didn’t get it right.”
They’re also afraid that asking people to share their data might turn them off or even drive them away. But that concern is mostly unfounded, Field said.
“I don’t personally understand their reticence, because just look at all of the data being gathered by the OTT players, and telcos have a more trusted relationship with their subscribers because they can be trusted,” Field said. “I’ve started to see evidence, though, that the mentality is shifting.”
Telcos, take two
Several factors are prompting this change in attitude, including stricter privacy laws that clarify what’s allowed and early successes in overseas markets showing it’s possible to balance user trust with new revenue streams.
Novatiq’s technology is integrated directly with a carrier’s own systems and operates entirely within its firewall. Each time a subscriber goes online, the platform generates a temporary, anonymous code inside that carrier’s secure environment.
But what does that look like in practice?
Together with a telco in the Middle East, Novatiq ran a campaign for Amazon that customized ads based on a user’s language and whether they had already downloaded the Amazon Prime Video app. That campaign performed 300% better than campaigns that didn’t use this type of targeting.
Meanwhile, another telecom operator in the region used Novatiq’s technology to optimize its marketing and cut campaign costs by 68% while increasing customer engagement by 12%.
These early results hint at what’s possible when carriers rethink their place in the digital advertising ecosystem, Field said.
“Telcos are becoming massively commoditized, much like utilities,” she said. “And so they need to be more proactive and open to the opportunity here – rather than seeing it as a potential problem.”
🙏 Thanks for reading! Also, ring, ring, it’s for mew. As always, feel free to drop me a line at allison@adexchanger.com with any comments or feedback.
