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Sunday, July 22, 2018
AT&T Has A Daunting Task In It’s Quest To Challenge Google and Facebook for Advertising Dominance
Randall L. Stephenson,
Chief Executive Officer of AT&T
On
July 5th,2018 the US Department of Justice filed a notice that it is appealing
an earlier ruling by a US district court judge approving the AT&T/Time
Warner Merger.The merger was authorized
in a very decisive ruling in mid June, 2017 by US district judge, Richard Leon
who approved the AT&T/Time Warner merger without any conditions. In the
months preceding the approval of the acquisition of Time Warner ($85
billion ), AT&T CEO,Randall Stephenson
consistently suggested that the merger would help his corporation
challenge the dominance of Google and Facebook ,in the area of internet
advertising.AT&T believes that the
recent acquisitions of Time Warner and
AppNexus ($2) billion provides them the distribution
;content(CNN,HBO,TBS,TNT) and
advertising platform that would provide more effective ways of serving mobile
Advertising to their over 100 million mobile customers.However,the evidence
suggests that AT&T management should realize that challenging Google and
Facebook for online advertising dollars will be a daunting task. Google and
Facebook are innovative technology entities built on the internet, but in
comparison ATT in spite of its recent acquisitions remains largely a digital
corporation built on a legacy telecommunication infrastructure. Currently
Google and Facebook control nearly 60% of advertising spend in the US but with
their innovative approaches, AT& T will have a difficult task mounting a
challenge especially regarding online advertising revenue.
Also, AT&T’s acquisition of Time
Warner has given them access to rich programming that is based on scripted and
edited content which remain expensive to produce and are declining in terms of
audience preference. On the other hand, Google and Facebook are built on a
platform that promotes user generated content which is free and tends to breed
more consumer interest. Also, the value of Google and Facebook comes from the
amount of registered users on their platform. In North America, Google remains
the dominant internet search engine with about 88% of internet search traffic
with about 1.17 billion daily users and Google Gmail has about 1.2 billion
users. The other top search engines as ranked by statscounter.com are
Microsoft- Bing which is number 2 with about 6.7% and Verizon owned Yahoo is
third with 3.67% of internet search traffic. However, on mobile devices and
worldwide Google's dominance is larger.
Furthermore, CNN Money reported in 2018
that Facebook has nearly 2 billion registered users and about 1.45 billion
daily active users. WhatsApp which is owned by Facebook has about 1 billion
daily users according to information provided by the company. In addition,
based on Alexa ranking the top six websites in the world are: 1.Google
2.YouTube 3.Facebook 4.Baidu 5.Wikipedia 6.Yahoo (owned by Verizon).The power
of Google and Facebook comes from their massive user base, where consumers and
advertising messages interact freely in continuous fashion. In contrast, all of
AT& T, including Warner Media, Direct TV and App Nexus’s active customer
base is projected to be in the region of 400 million .However,the number of
customers who are daily visitors to AT&T websites are projected to be
approximately 200 million. Actually none of AT&T related web properties are
even in Alexa's list of top 50 global websites. The most visited of AT&T
websites-CNN is ranked #125 by Alexa.Looking at it from a purely business
perspective, Google and Facebook provide free but advertising supported
platforms to users. As a result their user base continued to expand over the
years while AT&T payed platform has continued to stagnate.
Another aspect of the unfolding
dynamic is that the television distribution business (cable and satellite) of
which AT&T (Direct TV), Comcast and Dish Newark are a part of, has faced
huge challenges in the last few years. Over 22 million people have discarded
those services and replaced them with cheaper alternatives like Netflix and
Hulu. In the last two years Direct TV has lost over 2 million subscribers. So
the AT&T Time Warner merger is part of AT&T’s strategy of the dealing
with the dynamics of the pay television industry.
While AT&T has faced problems, one
of their target competitors- Alphabet (Google's) has continued to be on the
upward swing. Alphabet Google’s revenue for 2017 was about $110 billion dollars
and a large chunk of that was from internet advertising. The other company that
AT&T is targeting- Facebook's had revenue
of about $40 billion in 2017 and it was largely generated from internet
advertising. AT& T and Warner media's combined revenue for 2017 was about
$220 billion, but the advertising component may not have exceeded $30
billion.Approximately less than $3 billion of that may have been generated from
internet related advertising.
In essence, a comparative review
of internet advertising shows Google and Facebook are far ahead of AT&
T. AT& T's acquisitions of Time
Warner and AppNexus are a survival strategy that is designed to ensure the
company withstands the cut throat competition in the evolving mobile industry.
To remain relevant AT&T has been developing an Ad platform that narrowly
targets TV ads to its consumers based on user data. The acquisition of
AppNexus, a New York based firm which has an ad buying platform and is expanding
into online video advertising is AT&T’s arrowhead for challenging Google
and Facebook. To support the advertising effort AT&T recently appointed
Brian Lesser, CEO of its new Advertising and Analytics Company.
On June, 21, 2018 as part of the
strategy of stimulating consumer interest AT&T announed its plans to launch Watch TV, sports free low cost
streaming service.Watch TV will have 31 channels and available for mobile
customers who sign up for the new unlimited plans. Mass media analysts argue
that Watch TV will strenghten AT&T in the realm of online TV streaming
services.However, the facts suggest that strategy may not put the company in
strong contention for dominance of internet advertising. This is because
Google’s dominance of internet advertising is derived from the fact that it is
a gateway to to the web.Facebook's dominant position is also because it able to
offer a free platform that has rapidly grown its user base and it is the
dominant social networking site.
Facebook has acquired over 69 companies since its founding .The most
prominent Facebook's acquisition was WhatsApp ($19 billion)in 2014 and Instagram($1 billion) in April 2012
.Those acqusitions were part of the
grand strategy of achieving dominance on the mobile and web space. Furthermore,
Alphabet (Google) has acquired nearly 200 companies since inception.Analysts
say to dominate the web, Google developed its search engine and algorithm into
a very effective and efficient application that is unrivalled. Google also
developed the Chrome web browser and Android operating system (the most popular
mobile OS in the world).Also, Google owns YouTube which is a social network and
a video search engine. AT& T would find it a daunting task to outpace Google
and Facebook because its business platform; philosophy and processes may prove
inadequate for that challenge.
If there was any company that should
have challenged Google in internet advertising, it should have been Microsoft
especially after the Bing Search engine was launched in 2009. However, nearly
85% of Alphabet’s (Google) 2017 revenue
of $110 billion came from search advertising .In comparison Microsoft’s Bing
Search engine revenue for 2017 was about $1.8 billion based on its filing with
US Securities and exchange commission.Microsoft’s Bing 2017 revenue of $1.8
billion is significantly low giving the fact that it was launched eight years
prior. To dominate the web as Google has done any worthy competitor needs to
develop a dominant search or social networking platform; a successful browser;
mobile operating system or a dominant consumer web application. So far AT&T
is not on track to develop any of those applications.
Google and Facebook have proved
repeatedly that they have a business strategy tailored to developing web
applications or platforms that are innovative and enjoy high consumer
confidence.In addittion , the decision by the Department of Justice has brought
some uncertainty into the future of the merger,but most analysts think AT&T
will prevail in court. In spite of AT&T’s acquisition of AppNexus the
company would face daunting challenges in seeking to challenge for internet
search dominance .AT&T structure; platform and personnel still needs
further re-tooling before it can build an advertising juggernaut that would
compete with the current leaders. On the other hand the acquisition of Yahoo
and AOL by Verizon gives that corporation a better chance of challenging for
online advertising dollars. This is because Yahoo is the third largest search
engine and like AOL is content site built for internet users.
Google and Facebook's dominance of
the web comes from the fact that they understand one of the immutable laws of
Marketing-The law of Focus. All the acquisitions made by the two companies were
strategically designed to strengthen their core areas of search and social
networking respectively. Google’s dominance of internet search advertising is
akin to how Microsoft Windows dominated the desktop computer operating system
in the 1980's to early 2000's.Even till today Microsoft Windows still dominates
in desktop computer operating systems. Despite AT& T's CEO, Randall
Stevenson's dream of making AT& T challenge for internet search advertising
dominance, Google and Facebook are likely to remain the leaders because they
they have develpoed technology platforms with capabilities that are constantly
evolving,dynamic,unrivalled and difficult to replicate.
This
article was written by Mr.Henry Aladiume,who has a masters degree in Mass Communications
and over fifteen years experience in
Mass Media,Marketing,Brand Management and Internet Marketing.Mr.Aladiume is
currently pursuing a doctorate degree in Marketing at Northcentral
University,San Diego ,California.
https://www.youtube.com/channel/UCFhV_rSl1O9osRVmcpObEbg? view_as=public (My YouTube Channel)
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Photo/Picture
Credits :By Robert Scoble -
Flickr, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=3460064
Flickr, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=3460064
Friday, July 20, 2018
Tuesday, July 17, 2018
Saturday, July 14, 2018
Friday, July 13, 2018
Wednesday, July 11, 2018
Monday, July 9, 2018
Natural Cure For Diabetes,High Blood, Pressue,Cancer and Heart Disease Based On Diet and Lifestyle
Natural Cure For Diabetes,High Blood, Pressue,Cancer and Heart Disease Based On Diet and Lifestyle
As we all know four of the major human ailments are :Diabetes,High Blood Pressure,Cancer and Heart disease.There is scientific evidence to show that a good lifestyle ;good diets and nutrition can cure these illnesses.In the link below you can watch the video that will show the great scientific basis on which the findings are based.The facts are very revealing and are shown in a very detailed,logical and simply way in the following link.
Sunday, July 8, 2018
Saturday, July 7, 2018
Thursday, June 28, 2018
Friday, June 22, 2018
Thursday, June 21, 2018
Sunday, June 17, 2018
Thursday, June 7, 2018
Saturday, June 2, 2018
On The iPhone Vs Android Debate
When people engage in debates about wether iPhone is superior to Android; it has remained a needless argument because when Apple launched the iPhone in 2007 it was a revolutionary technology that never existed in that form.Google which acquired Android from Andy Rubin debuted the first Android phone in 2008 a year after Apple launched the iPhone.The fact is that the first Android phone Google G1 was largely a copy cat of the Apple iPhone -the original and the leader.This court decision that was recently handed down against Samsung(the largest licenceee of Google's Android ) to tune of $550 million and the $ 8 billion dollars awarded against Google for infringing Oracle Java programming code used to develop Android is a confirmation that biggest difference is that while the Apple iPhone was a revolutionary original product ,Google's Android even though not entirely inferior was just a copy of an original product-the revolutionary and groundbreaking iPhone.
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