Comviva NewsLetter The Futurist - September Edition, 2019 | Page 16

DIGITAL DISRUPTION
SEPTEMBER 2019
Meanwhile, digital native players such as
the large search, social networks and
independent digital ad network players
have created massive advertising revenue
streams, several times those earned by the
telcos. They’ve been able to do this because
of the sticky user engagement that they
have created, together with their ability to
seamlessly integrate the right marketing
messages into the right user’s journeys
thanks to highly sophisticated analytics
engines. So, despite having a lot less
information than telcos do at the outset,
the behavioral profiles they can build over
time are much more sophisticated, informative
and monetizable than what telcos have
been able to do. This value creation ability
reflects in the market valuation – for instance,
in the U.S., over the last five years, the top
three digital services players have created
16 times the market value that the three
major telcos have.
Increasingly, digital native players are
solidifying their hold over their users by
launching a range of adjacent services
(either by themselves or in partnership).
For instance, a search or social network
player may launch payments, entertainment,
or healthcare services. These, in turn,
lead to even higher engagement, richer
information, better targeting ability, and
more opportunities for seamless marketing
messages. Such virtuous circles of multiple
digital services being orchestrated by a
central intelligent customer profiling and
targeting engine is sometimes referred to
a “digital consumer ecosystem” and virtually
every leading digital consumer player is
trying to create one. While the most striking
examples are the ones created in China,
these are being created in most other
markets as well.
While billions of dollars of value have been
created in consumer digital ecosystems,
the telcos which provide their Internet
access backbone, have only seen erosion
in value due to competitive forces. Over the
years, almost all telcos have attempted to
create digital services of their own, including
entertainment, chat, gaming, news, shopping,
health, etc. Most such attempts around
the world have either ended in failure or
received moderate success. There are of
course a few glaring exceptions, which are
well known, but these are outliers by far.
There are variety of reasons for widespread
failure but underlying these is the traditional
telco mindset and way of operating. The
inability to be agile (putting something out
there and then sticking to it despite low
traction). The inward-orientation and inability
to create disruptive user experiences (not
putting the user first or providing distinctive
benefits over OTT offerings). The
Increasingly, digital
native players are
solidifying their hold
over their users by
launching a range of
adjacent services,
either by themselves
or in partnership.
unwillingness to partner (wanting to build
everything in-house as a proprietary asset,
even if it isn’t best-in-class). Inadequate
investment in driving adoption of the new
services (leadership time, money,
experimentation). Using traditional
analytics techniques as the basis for
cross-sell campaigns, as opposed to the
much more sophisticated machine learning
driven “N=1” personalization engines that
are feasible today.
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