Direct Line Blog

Mobile carriers, card companies could be double-trouble for ad networks

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I've made no bones about my feelings toward in-app mobile ads. In a word, ugh. I still don't like when an Angry Birds Seasons ad disrupts my playing of Angry Birds Seasons (happened last week, so much ugh), but location-based targeting has made the ads at least more acceptable. Now AT&T AdWorks is getting in on the action.

The carrier's media sales division will launch a “branded store locator” in-app mobile ad product in Q4, Maria Mandel, VP of marketing and media innovation at AT&T AdWorks, told me at today's IAB Mobile Marketplace event. The product will let advertisers piggyback an app's location permissions and run ads that highlight a local brick-and-mortar location. Advertisers will also be able to deliver offers, product information and discounts via the ad, said Mandel.

Considering the article I've hyperlinked above, the product isn't exactly groundbreaking, but then I take into account the level of targeting AT&T AdWorks offers. Because AT&T AdWorks has access to AT&T subscribers' data (“aggregated and anonymized” data, as Mandel made sure to clarify), she said advertisers can target according to demographics, location, address, interests, mobile device and platform, and even a consumer's subscription information such as his or her data plan. If all the mobile carriers run similar ad network initiatives, dedicated mobile ad networks could be at risk.

I'll preface the next thought with the disclaimer that mobile ad networks aren't at risk of extinction, but I do think they could teeter toward the endangered list. Here's their doomsday scenario: I wrote an article recently on credit card companies as marketing partners. Visa and American Express have each launched mobile marketing-friendly initiatives. I assume the two, like any card-issuing financial services company, are girding themselves for the adoption of mobile payment services.

If I'm a Visa executive, I'm looking at the mobile carriers as though they're my university-mandated college roommate who's not really my style but brought the mini-fridge: “Hey, buddy, I'll grab the beer.” The card companies would want to get cozy with the carriers because the carriers can lean on the device manufacturers, software makers and app developers to make mobile payment services more card company-friendly. Likewise a carrier might want to team with a card company not only for more data for its ad targeting but data more indicative of a consumers' likelihood to convert.

It goes without saying that this is all strictly conjecture — I didn't whip up this idea until after I spoke with Mandel — but consider two of Google Wallet's launch partners: MasterCard and Sprint. An ad network was involved, but that entity merits a larger discussion and legitimate fear from the ad networks. It was Google.

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