Telcos and Advertising - Reporting from the trenches......

We've been working with STL Partner's Chris Barraclough for the past few months (only that long...sheesh) in putting together a magnum opus on the role of Telcos in Online Advertising for the 3 GSMA, which, barring a few edits was finished today.

The two really interesting things that really struck me while doing this were:

Firstly, its an industry in considerable flux - even in the 3 months or so from planning to completion, there has been continual experimentation and shifting in the understanding of what works, whats hot, and whats not. Even today for example, in GigaOm, there is an article on AT&T and Yahoo and the changing strategic situation between them. ( the interplay between the GYM club and the Telcos will be one of the major games in the last few years, we predict).

Secondly, all those planning Ad funded Telco services may pause to consider this:

The Telecommunications Industry Association this week issued its “2007 Telecommunications Market Review and Forecast” for the global telecommunications industry. The study, conducted by Wilkofsky Gruen Associates, found that telecom revenue worldwide amounted to $3 trillion in 2006, up more than 11% from the previous year....

....The U.S. market should hit about $1.2 trillion in 2010, the same year that the global market reaches $4.3 trillion, Gruen said.

And now consider these figures:

- Total Global Ad Industry 2006 - £434 bn, of which Internet is c $25bn
- Total estimated Ad Industry 2006 - £495 bn, of which Internet is c $43bn

Look at 2009, and compare it to the 2010 Telco figures above. Online Adspend is c 1/10th of all Adspend, and that is c 1/10th of all Telco spend. Even if Online Adspend were 100% of all Adspend, its still a small part of the overall Telco market.

Not really enough Adspend to go round, methinks...............