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Ad-blocking demands new strategies

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The rise of ad blocking shows it’s time to reorient publishing and advertising around the needs of users rather than those of publishers and advertisers, writes RICHARD CLOGG, Senior Technology Consultant at Acceleration.

Since the rise of mass media, there has been an implicit contract between audiences, brands, and publishers. Publishers invest in producing content, to entertain and inform their readers or viewers, largely paid for by advertising from organisations that wish to influence the audience.  That model has undermined by several waves of change since the birth of the web.

It all started when publishers introduced banner ads to monetise their web content, figuring that the digital world would work much the same way as print or broadcast. They soon found that advertisers weren’t willing to pay as much for digital placements as they were for print and broadcast. Brands, meanwhile, were often disappointed in the results they tracked from their digital campaigns.

And end-users, of course, grew to resent digital adverts as they became increasingly intrusive, thanks to roadblocks, pop-ups and pop-unders, self-playing videos, tagging, and other “innovations”. From the user’s point of view, ads slow down their page downloads, track their behaviour and stalk them across the web with unwanted offers for things they Googled earlier in the morning.

Little wonder that the ad-blocking feature in Apple‘s iOS 9 is causing such anguish for the advertising industry – it’s an enormous threat to their revenues in an overtraded market where margins are already thin. As Business Insider’s Paul Berry writes, ad-blocking isn’t just a software feature – it’s a cultural movement.

Meanwhile, Goldman Sachs says that the rise of the social media giants and the backlash against digital advertising will see the ad industry “fundamentally restructured” in the years to come. But given that no one seems particularly happy with the status quo – even the IAB admits the industry has “messed up” – that might not be a completely bad thing.

What might an advertising paradigm for the future look like? It would be focused on user experience first, rather than on automation, efficiencies and data gathering for agencies, brands, networks, and publishers. It would ensure faster loading of content. And rather than steamrolling users with invasive sounds and visuals, it would present them with targeted, interesting experiences that they welcome.

Publishers, brands, and the adtech companies are still shaping the future of advertising. However, the future might include an element of paid subscriptions for users who don’t want to see advertising at all, more use of native advertising as a way of offering experiences that feel natural within the publisher’s environment, and the use of the platforms that the likes of Twitter, Facebook, Apple News, and Medium offer for publishers.

We find it particularly interesting how these new platforms might enable more efficient targeting for advertisers and a better user experience.  On the flipside, content producers risk being sidelined as distributors and aggregators such as Facebook, Apple News, Medium and Twitter control the audience and monetize their content.

We’ll also see some interesting innovations around mobile, for example, the advances offered by Google’s Accelerated Mobile Pages project.

Advertising accounts for around 1.5% of the GDP in the United States – a number that has stayed constant even as spending has spread from print to broadcast and then to digital. This is a large industry everywhere in the world. We don’t see the advertising sector disappearing completely as a result of the ‘adblockalypse’, but it is going to change dramatically. There will be new paradigms in consuming and publishing content, possibly enabled by new tools and technologies.

Against this backdrop of change and transition, publishers and brands face the challenge of ensuring that they can target and engage the audience wherever it goes. To succeed, they will need to create digital frameworks that help them to accommodate a shift in how audiences move around and interact with content. An agile but robust architecture and streamlined business processes will help them navigate the changing the landscape.

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Rain, Telkom Mobile, lead in affordable data

A new report by the telecoms regulator in South Africa reveal the true consumer champions in mobile data costs

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The latest bi-annual tariff analysis report produced by the Independent Communications Authority of South Africa (ICASA) reveals that Telkom Mobile data costs for bundles are two-thirds lower than those of Vodacom and MTN. On the other hand, Rain is half the price again of Telkom. 

The report focuses on the 163 tariff notifications lodged with ICASA during the period 1 July 2018 to 31 December 2018.

“It seeks to ensure that there is retail price transparency within the electronic communications sector, the purpose of which is to enable consumers to make an informed choice, in terms of tariff plan preferences and/or preferred service providers based on their different offerings,” said Icasa.

ICASA says it observed the competitiveness between licensees in terms of the number of promotions that were on offer in the market, with 31 promotions launched during the period. 

The report shows that MTN and Vodacom charge the same prices for a 1GB and a 3GB data bundle at R149 and R299 respectively.  On the other hand, Telkom Mobile charges (for similar-sized data bundles) R100 (1GB) and R201 (3GB). Cell C discontinued its 1GB bundle, which was replaced with a 1.5GB bundle offered at the same price as the replaced 1GB data bundle at R149. 

Rain’s “One Plan Package” prepaid mobile data offering of R50 for a 1GB bundle remains the most affordable when compared to the offers from other MNOs (Mobile Network Operators) and MVNOs (Mobile Virtual Network Operators).  

“This development should have a positive impact on customers’ pockets as they are paying less compared to similar data bundles and increases choice,” said Icasa.

The report also revealed that the cost of out-of-bundle data had halved at both MTN and Vodacom, from 99c per Megabyte a year ago to 49c per Megabyte in the first quarter of this year. This was still two thirds more expensive than Telkom Mobile, which has charged 29c per Megabyte throughout this period (see graph below).

Meanwhile, from having positioned itself as consumer champion in recent years, Cell C has fallen on hard times, image-wise: it is by far the most expensive mobile network for out-of-bundle data, at R1.10 per Megabyte. Its prices have not budged in the past year.

The report highlights the disparities between the haves and have-nots in the dramatically plummeting cost of data per Megabyte as one buys bigger and bigger bundles on a 30-day basis (see graph below).

For 20 Gigabyte bundles, all mobile operators are in effect charging 4c per Megabyte. Only at that level do costs come in at under Rain’s standard tariffs regardless of use.

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Qualcomm wins 5G as Apple and Intel cave in

A flurry of announcements from three major tech players ushered in a new mobile chip landscape, wrItes ARTHUR GOLDSTUCK

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Last week’s shock announcement by Intel that it was canning its 5G modem business leaves the American market wide open to Qualcomm, in the wake of the latter winning a bruising patent war with Apple.

Intel Corporation announced its intention to “exit the 5G smartphone modem business and complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices”.

Intel said it would also continue to invest in its 5G network infrastructure business, sharpening its focus on a market expected to be dominated by Huawei, Nokia and Ericsson.

Intel said it would continue to meet current customer commitments for its existing 4G smartphone modem product line, but did not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020. In other words, it would no longer be supplying chips for iPhones and iPads in competition with Qualcomm.

“We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” said Intel CEO Bob Swan. “5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realise the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”

The news came immediately after Qualcomm and Apple issued a joint announced of an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm, along with a six-year license agreement, and a multiyear chipset supply agreement.

Apple had previously accused Qualcomm of abusing its dominant position in modem chips for smartphones and charging excessive license fees. It ordered its contract manufacturers, first, to stop paying Qualcomm for the chips, and then to stop using the chips altogether, turning instead to Intel.
With Apple paying up and Intel pulling out, Qualcomm is suddenly in the pound seats. It shares hit their highest levels in five years after the announcements.

Qualcomm said in a statement: “As we lead the world to 5G, we envision this next big change in cellular technology spurring a new era of intelligent, connected devices and enabling new opportunities in connected cars, remote delivery of health care services, and the IoT — including smart cities, smart homes, and wearables. Qualcomm Incorporated includes our licensing business, QTL, and the vast majority of our patent portfolio.”

Meanwhile, Strategy Analytics released a report on the same day that showed Ericsson, Huawei and Nokia will lead the market in core 5G infrastructure, namely Radio Access Network (RAN) equipment, by 2023 as the 5G market takes off. Huawei is expected to have the edge as a result of the vast scale of the early 5G market in China and its long term steady investment in R&D. According to a report entitled “Comparison and 2023 5G Global Market Potential for leading 5G RAN Vendors – Ericsson, Huawei and Nokia”, two outliers, Samsung and ZTE, are expected to expand their global presence alongside emerging vendors as competition heats up.

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