Phones with ads? The idea is nothing new. A number of carriers have done the same but not one became successful. We remember the likes of Amazon’s AMZN.O, Sprint’s Boost Mobile, and Virgin Mobile USA doing it before. Now, AT&T wants to try by launching mobile phone plans that are subsidized with advertising. The carrier is said to be considering this move. It was CEO John Stankey who shared the plans with a source. The company has been evaluating its portfolio and business to see what can be improved or sold off.
AT&T has been trying to reduce its debt load. Xandr, its advertising-technology unit, may be sold off according to a source. An ads-generated phone plan may be annoying but it may not matter to people who want some more discount off their usual payment.
What’s a five or ten-dollar reduction from the mobile bill? A few ads loading on the screen. That is something we can probably live with if we’re really strapped for cash or want to save money. AT&T is hoping an improved advertising targeting system will help and make the system work.
At the moment, engineers of the mobile company are working on possible “unified customer identifiers”. The goal is relevant advertising and fine-tuned ad targeting. With this idea, AT&T may be able to sell ads to higher prices.
The only challenge we see is the fact that consumers will want to protect their privacy more by not allowing their media use to be tracked. AT&T may face those privacy challenges. In the US, there is the California Consumer Privacy Act.
AT&T may be trying a similar thing with HBO Max. A special ad-supported version of the streaming site will roll out next year. It will be a foundational element that is expected to offer new advertising inventory. This will probably give way to new phone plans with those ads in maybe “a year or two” as described.