A few weeks ago, the European Commission’s anti-trust division gave the unconditional go-ahead to a joint venture between four of Europe’s largest telcos to develop a new EU-wide digital advertising platform which, if successful, could seriously challenge the lucrative hegemony of Google and Meta throughout Europe.
The four telcos – Vodafone, Deutsche Telekom, Orange, and Telefonica have been working on the joint venture for nearly two years.
While it will be headquartered in Belgium, the plan is to trial the new offering in Germany, Spain, and France first, with the rest of Europe, including Ireland, likely to follow at a later date.
The aim of the joint venture is to create a pan-European digital advertising platform that will respect both the consumers’ desire for greater privacy and control while also adhering to the EU’s increasingly strict regulatory regime in areas like data privacy, transparency, and competition.
The telecommunications industry has been down this road before -unsuccessfully
Customer privacy, in particular, has been singled out by joint venture partners.
According to their joint statement, the new offering will give “consumers a step change in the control, transparency, and protection of their data, which is currently collected, distributed and stored at scale by major, non-European players,” a very clear reference to Google and Meta.
The telecommunications industry has been down this road before. On paper, it makes sense. In reality, however, the experience has been somewhat different.
The US telecommunications giant AT&T, for example, had high hopes when it bought the programmatic AdTech platform AppNexus in 2018 for $1.6bn (€1.5bn).
At the time AT&T said it would integrate the business into its premium video content arm and use its first-party data to help grow its nascent advertising business.
Having rebranded it as Xandr but failing to successfully integrate it with its core business, AT&T sold the business three years later to Microsoft for $600m less than what it coughed up initially.
AT&T is by no means unique. Other telcos such as SingTel in Singapore bailed out of the AdTech sector when it sold Amobee in July 2022 while Telenor effectively exited the market in 2020 when it sold TapAd. Then there was the US telco Verizon which beat a hasty retreat when it offloaded Yahoo in May 2021.
One of the main reasons why telcos have struggled to crack the digital advertising market is the significant technological barriers to entry.
AdTech is a hugely competitive, complex and resource-draining business and established players like Google, Meta and Amazon have invested billions of euro in developing their platforms while building up vast networks of advertisers and publishers.
On the other hand, the timing of this new offering might be right
This makes it extremely difficult for new entrants to compete and build any meaningful scale. But they are also two completely different business models, each with their own unique characteristics and financial and infrastructural requirements.
On the other hand, the timing of this new offering might be right. The EU and its various regulatory outposts have made no secret of their suspicion of non-European Big Tech companies and their errant ways when it comes to data privacy and transparency in an advertising market that has become increasingly opaque.
Indeed the announcement of a tie-up between four of the largest telcos in Europe came within weeks of the EU publishing a report in January which described the current setup of the digital advertising sector across Europe as “unsustainable” and in need of reform if the EU is to lessen the power held by the likes of Google.
While only time will tell if this new offering will be successful, it looks like the digital advertising market in Europe looks set for a very interesting battle in the years ahead.
Here is the news
NewsBrands Ireland has launched a new print and digital campaign to highlight the fact that 82pc of Irish adults now read a print or online news title every week.
According to the latest Kantar TGI Republic of Ireland research, some 3.25 million people read a print or digital news title every week.
In addition, 78pc of 16 to 31-year-olds read a news title or access a news app every week, according to Kantar which publishes the research twice a year.
Spunout, the youth mental health and information charity has partnered with Accenture for a new awareness campaign designed to engage, educate and encourage young people to talk about issues surrounding equality.
The campaign, which is called GEN E will showcase the voices, stories and experiences of LGBTQ+ young people and those from ethnic minority backgrounds in an effort to encourage conversations about real inclusion and diversity issues.