Verizon's Pivot From Stodgy Old Telco To Sexy Millennial Ad Brand Isn't Going So Well
from the you're-not-built-for-this dept
We've noted for some time now how Verizon desperately wants to pivot from dull old broadband provider to sexy, Millennial-focused video advertising juggernaut. To accomplish this task, Verizon acquired both Yahoo and AOL, smushed them together, then hoped this would be enough to compete with the likes of Google and Facebook. The effort distracted the company from upgrading or repairing much of its fixed-line broadband footprint, since investing in networks isn't profitable enough, quickly enough, for many on Wall Street.
But Verizon's pivot hasn't been going so well. The company's Go90 video platform, which was supposed to be the cornerstone of the company's effort, recently fell flat on its face after Verizon spent $1.2 billion on the effort. And the company's Oath ad network, the combination of AOL and Yahoo, hasn't been doing much better, with Tim Armstrong (formerly of AOL) now heading for the exit (warning: annoying paywall):
"Mr. Armstrong, who came to Verizon in 2015 when it acquired AOL and helped steer its purchase of Yahoo two years later, had tried to combine the two internet companies to challenge Google and Facebook Inc. in digital advertising. But those efforts so far have failed to generate much growth or make the unit, called Oath, more than a side note in the wireless giant’s earnings."
Everyone (including Verizon) tends to forget that Verizon usually fails when it wanders outside of its core competencies (read: running networks and lobbying to kill consumer protections and hinder competitive threats). From the company's arguably terrible VCAST services to its failed app store, Verizon has long engaged in "me too" efforts that don't last because they're simply not good. And they're generally not good because, as a government-pampered telecom monopoly, Verizon simply isn't good at innovation, creativity, competition, disruption pr actually listening to your users. They're alien concepts to most Verizon executives.
The company's failed streaming partnership with RedBox was another such example, and who can forget the company's attempt to launch a news website dubbed Sugarstring that collapsed in embarrassment after critics pointed out Verizon tried to ban writers from talking about net neutrality or surveillance.
Ironically though, part of the reason given for Verizon's problems getting Oath off the ground (at least according to the Wall Street Journal's sources) is that the company wasn't willing to be snoopy enough:
"Verizon and Oath executives, however, have disagreed over what some employees within the digital ad unit see as an overly conservative approach to using wireless subscriber data to boost Oath’s advertising revenue, people familiar with those discussions say.
Senior executives within Verizon are wary of potentially alienating lucrative wireless customers in the name of adding incremental advertising revenue, these people said. Oath contributed less than $4 billion in revenue during the first half of the year, compared with the wireless business’s $44 billion.
Verizon agreed to share with Oath anonymous information on subscribers’ age, gender, phone language, and data plan size, for example. But these people say the carrier refused to share information on the apps customers used and their web browsing activity unless users explicitly opted in.
Verizon, you'll recall, was one of the key players responsible for killing FCC broadband privacy rules last year. It also faced a major privacy scandal after it was found the company was covertly modifying user wireless packets to track users around the internet without telling them or providing working opt out tools. It took security researchers two years to even discover this was happening, and another six months of public shaming before Verizon made it possible to opt out.
Gun shy from that experience, and wary of courting additional scandal as it rushed to kill consumer oversight (both on the national and state level), Verizon subsequently made Oath's snoopiest systems opt in. And the result pretty clearly highlights why ISPs and marketing folks hate the entire opt in paradigm:
"Given the choice, most of Verizon's 116.5 million wireless subscribers decided not to take the deal. Just 10 million of them have opted into the data-sharing program, known as Verizon Selects, according to the Journal."
Again, it's pretty ironic that Verizon only went the opt in route because it was wary of courting additional scandal after it was caught spying on all of its wireless users without its permission. But it really also can't be over-stated at how terrible government-pampered monopolies are at actually building innovative and competitive products. You'd think that eventually, Verizon would realize its best bet lies in doing what it's good at, be it running wireless networks, or lobbying the government to screw over competitors and consumers.
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Filed Under: advertising, internet, portals, tim armstrong
Companies: aol, oath, verizon, yahoo
Reader Comments
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Yeah, but that only gets Verizon some of the money, and the company’s higher-ups want all the money.
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And that would be ... what? Customer service?
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Re: literally just the "How Do You Do, Fellow Kids?" meme come t
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That is the wrong approach, as what they have to do is to challenge them as a search engine and social media site, and then the advertisers will come calling.
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But they don't seem to care about actually succeeding.
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Flickr could be big. But they just don't care. A year ago they've changed their API and suddenly I was unable to upload my pictures from digikam any more. So I swiched to piwigo, and didn't look back.
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And I wonder why the millennials aren't interested...
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I’m surprised they haven’t gone for MySpace, LiveJournal, and Napster yet.
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If I was born 10 years later I know I wouldn't have a clue what either of these sites are if I heard their name.
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*Reads article*
oooohh so it seems that light touch regulation in fact, kills innovation... who knew?
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Once again T E C H D I R T MOCKS another NOT-GOOG corporation.
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Re: Once again T E C H D I R T MOCKS another NOT-GOOG corporation.
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Re: Re: Once again T E C H D I R T MOCKS another NOT-GOOG corporation.
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FTFY-AricTheRed
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HOW to fail...in 1 easy lesson
Think of all the services and such that Google has running at the same time, And SEE how they are doing them..
MOST sections are mostly independent. And most of the money invested into them, comes from the Profits of the other, THAT WORK. Profits that would only be PAID out to the top employees..Its like investing INTO YOUR OWN COMPANY..(GET A HINT)
If an idea or Concept is going to Cost to much IN THE END, then you drop it. You AIM for the middle price points, NOT THE TOP. If only the TOP 10% can afford something...you have LOSt the bottom 90%.
Google has expanded into so many directions and parts of the internet, that its like a WEED. It takes the little it finds and USES IT.. It dont sit there saying, OH! we can charge abit more, Oh! we can charge abit more.. over and over. HOW many of the services COST YOU, money?? NOT MANY.. and a small company cna jump into it also, and create their OWN site and MAKE MONEY ALSO.. and NOT be Robbed by google changing PRICES YEARLY..
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Verizon
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cme_Subscriber_Agreement.pdf
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