New Facebook Tool Pits Wireless Carriers Against Each Other In War For Service Switchers
Facebook is hoping this fact - along with a new ad service just for telcos - will up the ante in their ongoing war for customers.
It's incredibly difficult for wireless carriers to get new customers: Monthly customer "churn" (consumers who switch services) is only about 1% among AT&T and Verizon. Of the 326 million wireless subscribers in the U.S., only 19 million switch companies in a year. But when they do, they get locked into new two-year contracts - which makes attracting new customers the most important thing a telco can do.
Facebook's new tool gives telcos help in measuring their ad campaigns.
Facebook collects anonymous user data regarding the operating systems, devices, and carriers used by people who have seen a given advertising campaign. Then, Facebook is able to create a control group in order to find out how many people who saw the campaign purchased new handsets or switched carriers.
Facebook said it was important to measure purchase outcomes because 90% of people who purchase a telecommunications product after seeing a Facebook ad do so without actually clicking on the ad. Nonetheless, there is a measurable difference in purchasing behavior between those who have seen a Facebook ad and those that have not. Facebook is hoping the fact that mobile ads are nine times more successful at getting consumers to make wireless purchase decisions - including switching carriers and "differences in adoption rates of devices or carriers segmented by demographic groups," as Facebook puts it - will make telcos advertise more aggressively on Facebook. The tool will be available to telcos in nine different countries.
The company announced in July that its mobile ad business had grown to 41% of its total ad revenue.
Investors are still waiting on the company to roll out its hotly anticipated video ads, which have been delayed from their planned launch in October.