Monday, 16 April 2012

Ad funded mvno business model and the MVNO industry summit

Ad funded MVNO 

As the MVNO summit is just around the corner; a question that is often asked and/or a comment often made in MVNO conferences is:
  • will MVNO business model X work in Y country/market, or
  • X MVNO business failed so that MVNO model does not work... 

Is the ad-funded MVNO model still viable?

The ad -funded model is one of them, and as such has been part of my new blogs and old legacy MVNO blog for a while and can be found here: MVNO business models. You then of course have the other end of the scale, usually those who argues against MVNOs from the beginning and have now had to swallow their words as MVNOs make bigger and bigger percentages of MNO bottom lines: people who say that MVNOs as a whole  don't work when one happens to fail! Back on the more moderate heckler  let's deal with One of the most frequent is that, if Blyk failed then the ad funded model does not work... This is just plain wrong on a few levels:
  1. 50% of all new businesses fail. In this respect, MVNOs are probably one of the best businesses you can invest in, as the failure rate is actually in single % figures in most countries over time. It has been higher, for example in France at first, when the regulator forced MVNOs, the result was that the network operator agreements were so restrictive that they strangled the first MVNOs... however they were all absorbed by the host MNO, so you could argue it was intentional: if they were proper failures the MNO would have set them out to dry rather than absorbing them. Blyk was also absorbed by its MNO - an MNO has full visibility of an MVNOs activities and potential, and they do not flog a dead horse!
  2. The "ad" is very generic. If you look at the add business over the last few years you will see most of the traditional spend has all but disappeared and been replaced with display ads, Blyk started with a model based on ads that suddenly went into decline.
  3. Mobile advertising is still in its infancy, it has been for 5 years, however this is now changing

Will the Brand MVNO, supermarket MVNO model, etc work in my country? 

In short, what does this mean? well it means that there has never been a better time to launch an ad funded business, as long as you are choosing the right type of ads, when to send them and, like any business, are careful how you spend and manage cash flow.

So, with the biggest MVNO summit to date, now extended to three days, let's make the MVNO Summit about where and how we are moving models like the ad funded model; add funded voice, data and SMS/MMS, to market in new countries, and maybe even take part in the MVNO challenge...

I will be adding to this list over the coming months, feel free to comment, like the  MVNO Facebook page, MVNO Google+ page or follow @MVNO_ on Twitter if you want to be notified of these updates