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Advertising Revenue

By TelcoJanuary, 2007May 21st, 20242 min read

Well, it’s nice to be back after the break (what break?). There are some exciting developments planned for Quack in the new year, so “watch this space”.

A friend was kind enough to forward me an e-mail promoting yet another new phone company – this one called Future Phone. It’s not the first of its kind – another friend sent me Jajah just a few weeks earlier. And there are loads of other examples.

The model is simple – they give you free* phone calls, typically using a low-cost VOIP platform, and push some advertising your way before or even during the call.

This is a simple response to the challenge of falling revenues and falling margins. The basic phone call costs a fraction of what it cost just a few years ago, especially when it’s carried over a packet-switched network, so vendors are forced to find alternate sources of revenue.

Portals like Google have led the way in refining the advertising revenue model. The beauty of these revenue models is that from the advertiser’s perspective, they are far more targetted.

Traditional advertising, where you place a billboard on a busy street, or play a TV ad at a particular time slot, is based on the premise that the people driving that street or watching that TV show might also be interested in your product.

But portals and phone companies know so much about you, it’s scary. They know what you’ve searched for, who you called, who called you, and where all of your friends are. This information can be used to target advertising to specifically what you are likely to want.

Where is it headed? Well, the next piece of revenue to get cannibalized is going to be SMS, in favour of GPRS. So watch out for the IM client for your phone or PDA that uses GPRS as the transport, and pushes advertising. And wait to see the impact of privacy laws (in the jurisdictions that actually have them) to be tested by these new practices.

This was also posted at [Billing Bureau].

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