Digital Advertisement Frauds: A Telco Story (Part 1/3)

Look around you and you see posters, hoardings & stand-ins. Look at whatever screen you carry or face and you will see videos, popups & banners. These are “Advertisements” and they are everywhere!

I will not be going overboard when I say advertisements are the fulcrum of relationship between every business and its consumers. Organizations put significant investments into their marketing functions which in turn enables advertisements.

While earlier advertisements were statics in nature – channel run time, physical hoardings etc., they were easy to track to ensure the investments are protected. But, with the advertisements becoming digital, increasingly dynamic & internet driven – There has been an increasing need for measuring & protecting the advertiser’s or brand’s money and even the publisher’s real estate which is used for ad delivery & consumption.

Like it or not – In Telecom space, Digital Advertisements are coming to steal sleep off every fraud manager’s eyes.

From the risk perspective, the domain is complex and different from the traditional Telecom frauds, but the most important point is that advertisements from the internet space bring fraud exposure levels which are much higher than what Telco’s are used to. And containing that, will be a real challenge!

This 3 part blog will put a light on relevance of Digital Advertisements in telecom space along with providing a high level understanding of it’s ecosystem and fraud risks it injects. Idea is to give readers a basic knowledge of the digital advertisement space and the inherent risks.

This is the 1st part of the 3 part blog and covers why telecom industry is looking at Digital Advertisements as their next enabler. 


Part 1 : Digital Advertisement and Telcos: A match made in heaven

When we think about internet or technology, there are 4 names which cross mind – Google, Apple, Facebook & Amazon.

What the 2 of these 4 giants, Google & Facebook, have taught us that AD revenues are a big deal when it comes to the digital world. With Apple & Amazon also planning to jump the advertisement bandwagon, the belief only gets stronger.

No surprise that Google & Facebook earn 90% of their revenues from advertisements. Also, most of the Apps, specially communication apps also have advertisements at the centre of their revenue model.

Considering this, it was just a matter of time our own Telecom industry shifts its focus on exploring the digital advertisements as one of their primary source of revenue.

The likes of Verizons, Axiatas & Singtels have already invested big in the area of advertisements.

Also, some other leading operators like Vodafone, Telefonica, Etisalat and France Telecom have also openly agreed for a bright future of advertisements in telecom industry.

Digital advertisements: Attracting attention within Telcos

If you look at telecom industry as an advertiser, you will find telcos spending 10-15% of their total yearly revenues as marketing budget, out of which 46% is only on digital advertising like website banner ads, video ads etc.

That is quite higher than any other comparable industry sector.

And if we believe certain studies conducted by industry experts like Adobe, spend on advertisements is only set to grow:

It only shows that telco industry agrees that this spending will only increase with mobile advertisements leading the pack.

What will drive this spending on Advertisements further ?

Now lets look at what are the factors which are going to drive the investments in the area of advertisements further.

If you look at the areas marked in yellow in the chart below, you will find that digital Advertisements are among the fastest growing revenue streams for Telecom Industry.

And, if you look at the elements which are marked with red circles, you will see a list of services on which telcos are currently betting big on.

These services, which include M2M, Gaming, Music, Video etc., interestingly are set to become the “enabler platforms” to drive advertising revenues further.

And not only that, these services also ensure that Telcos have sufficient advertisement inventory for them to upgrade from just an advertiser to become a big ticket publisher or a small AD Network.

This is the reason why you will find that these services have “Ad Delivery” inbuilt as a core functionality within their framework.

Digital Advertisements are key to make upcoming & exiting product & services more affordable to a Telco’s subscriber base and in turn boost adoption

Apart from this, we all are aware that content services are set to become a big ticket to monetize the large investments Telcos have been making towards infrastructure & quality of data services.

There are researches from the likes of eMarketer which indicate that content is set to make up 66% of the total traffic in Telco data pipes by the year 2017.

Driving on content services, advertisements are set to attract 100 billion dollars in next 1 year and an increase of 233% increase mobile ad spending in next couple of years.

Now, there is little doubt that advertisements are set to become one of the major source of revenues for Telcos or power that next big idea which will be a star of their upcoming annual report!


In the next part of the blog, we will understand how the digital advertisement ecosystem works along with understanding how big is the problem of fraud in that ecosystem. You will not have to wait far too long, that I promise! 

Abhijeet Singh

Abhijeet is currently working as Principal Consultant with Subex.

He specializes in Telecom Fraud Management and his 360 degree experience in this field includes extensive exposure in Fraud Operations Management, Consulting & Advisory, Risk & Health Assessments, Business Development – Product & Managed Services and Analytics.

Out of professional life, he is a blogger, tech enthusiast and a traveler.

Should you still be “keeping your eye on the ball”?

In almost every major sports analogy where a ball is used, the coach is always telling players to “keep their eye on the ball.” In baseball this is obviously critical. Certainly the same holds true in cricket. Other sports rely on this fundamental as well; the ball is the player’s universe. Without keeping your eye on that ball scoring doesn’t happen, and victories escape our favorite teams.
In the world of Revenue Management the same analogy has been applied to those charged with protecting revenues. “Keep your eye on the money.” We’ve all received our marching orders to monitor and protect the revenue process, from where value is generated, billed, and ultimately collected.
What has inevitably happened, however, is an ever-growing expansion of what was originally a relatively simple carrier business model. Consider this maturing timeline for most operators over the years:

  • Risk Management (“ERM”) became an embedded factor in enterprises as they grew larger
  • Revenue Management soon grew on its own within Risk Management, eventually dominating the ERM program with both Fraud and Revenue teams operating (mostly) autonomously
  • Operator business models have since evolved well beyond the classic voice services that ERM was chartered to monitor, further stressing an already crowded ERM oversight domain

Suddenly (actually, over the last 20 years), Risk Management programs are finding that there is no longer a single ball to keep their eye on; in fact, there are many. Revenue is now generated from many streams (e.g., product lines), all using different business models. But what makes this even more difficult is the relationships and interdependencies these product lines have with each other – these also need to be monitored for risks and failures. Now ERM can’t simply deploy independent, autonomous teams to track individual streams – the collaboration and sharing of consistent data and resources is now a critical requirement.
Putting this into context, let’s talk about fictitious Carrier “A” … we’ll call them Rio Hondo Telecom:
Rio Hondo offers 3G and 4G mobile services. They also operate as an ILEC (Independent Local Exchange Carrier), so they have invested in a great deal in underground plant, in the form of both copper and cable, to serve the majority of their 1 million customers. Through that plant they offer fixed line telephony, broadband, and video broadcast services to consumers, and high-speed business service packages to enterprises. Unfortunately, they have no last mile access to 15% of their enterprise customers, and 10% of their standard consumer customer base is too far away to receive broadband and broadcast services. Therefore, Rio Hondo has formed several partnerships with other operators to round out their service offering to those outlying customers. They started carrying services 65 years ago…and their ERM teams formed in the early 1980’s. They have limited Fraud and Revenue controls in place, yet their business models have grown well beyond what they can easily monitor for risks. Where should their ERM teams be focusing their resources? Candidates must include both revenue generation and revenue support functions, among others.

  1. Revenue generations functions:
    a. Event creation, mediation, and billing
    b. Recurring charge integrity
    c. Retail sales of equipment and services
  2. Revenue support functions:
    a. Retail and call center provisioning operations, and change requests
    b. Order integrity and fall-out management – critical for bundled service delivery
    c. Capturing of traded/returned equipment, including tracking to warehouse receipt
    d. Chargeback management, merchant charging integrity
  3. Cost and other support functions:
    a. Service call management and charging
    b. CPE and inventory assurance
    c. Commissioning integrity
    d. Partner services delivered as ordered, billed appropriately

This operator example is not uncommon, and certainly something that we have successfully worked with operators to manage for much of the last 16 years. What has been learned over this time that ERM can’t just keep their eyes on the “business model complexity” ball; now ERM must also keep their eyes on every ball that deals with product, service, and support inter-dependencies that now dominate the carrier business landscape.
This is the foundation that drove the birth of the ROC from Subex. First envisioned over a decade ago, the latest generation of ROC3 products fully support the monitoring and instrumentation of every facet of Revenue, Cost, Fraud, and Network Asset protection within the operator’s business…all from a single, integrated architecture. With ROC3, operators can not only keep their eyes on as many balls as their business can throw at them, they can easily manage which ones to catch, and which ones to hit “out of the park!”

John Brooks

Vice President – Product Management – John Brooks serves as the Vice President of Product Management in Subex. He has over 26 years of experience in Telecommunications, spanning Fixed, Mobile, Data, and Video technologies. Within the industry Mr. Brooks was a board member for the GBA, founded the TM Forum Fraud team (authoring the first International Fraud Operations and Fraud Classifications guides), and now leads the TM Forum Network Asset Management team, focusing on transformative best practices for SDN/NFV operations. Over the years Mr. Brooks has served as an Advisory Board member for a prominent technical university, and has spoken at over 50 industry events and authored numerous papers on topics spanning IoT, Digital Disruption, Big Data, and Enterprise Risk Management. With Subex (formerly Connexn/Azure) since 1999, he has directed over 40 successful Cost, Revenue, and Business Optimization engagements at over 24 top-tier carriers globally, including AT&T, America Movil, BT, Vodafone, and Verizon.

A Sentimental Journey

When Doris Day sang the jazz classic ‘Sentimental Journey’ she described the joy of returning home to the things she had missed. Back here in the 21st century we also feel a sense of joy when we get home, but it’s often because we can finally get a reliable internet signal through our Wi-Fi.   Mails download, WhatsApp messages pour in and all those photos and vids we took get uploaded to share.   The sentiment that people feel when they get home and find their internet service is not working is generally far less happy. It’s a sentiment that I experienced first-hand, having suffered from a service that was slower than old fashioned dial-up for several months. Web pages with sliding graphical widgets and targeted advertising completely stopped loading. After endless rounds of calling support, listening to distorted 80’s pop tunes while stuck on hold, and re-booting of modems I just didn’t want to speak to them anymore. In today’s marketing vernacular, I was not having a good “customer experience”, so I left them and went to another service provider.

Although the initial buzz around customer experience may have died down from a few years ago it is still regarded as the single most important ingredient needed to have a successful business. In a recent report Watermark Consulting studied the cumulative stock returns of the top 10 “Leaders” and bottom 10 “Laggards” in Forresters CX index and found

Leaders outperformed the broader market, generating a total return that was 35 points higher than the S&P 500 Index.

Laggards trailed far behind, posting a total return that was 45 points lower than that of the broader market.

In a world of commoditized products and services businesses now rely on customer experience more than ever to differentiate themselves from the competition. However, in the report ‘Customer Analytics: How to make Best use of Customer Data’ the Aberdeen Group has reported that

96% of companies are not fully satisfied with their ability to use data (both customer and operational) in CEM programs’

In order to provide good a customer experience companies need to do 5 things

  1. Introduce good data governance practices around customer data
  2. Create a unified view of customers across all touch points
  3. Profile and segment their customers
  4. Track the emotional impact of a customer interactions with the company over time.
  5. Use that intelligence to guide agents on how to provide the best support for customers.

Enter the world of the customer journey map. A customer journey map (CJM) is a visual representation of all the interactions a customer has with a company, through every touch point, with a measure of the customer’s attitude towards the company during those interactions. For example, receipt of a bill may be a negative experience, whereas receipt of some reward, like bonus loyalty points, would be viewed more positively. These sentiment scores may be collected directly through touch point surveys and recording call dispositions, or inferred based on history and through the use of analytics.

Agents that have an immediate grasp of a customer’s journey and level of satisfaction are far more successful at resolving issues and upselling than agents who do not have that insight.

The first step in understanding a customer’s journey is to introduce good data governance practices and create a unified view of the customer. The Aberdeen group also observed (in their ‘Big Data in CEM’ study) that

More than half of all (56%) businesses lack a unified view of the data captured across multiple channels and stored in systems such as customer relationship management (CRM), marketing automation, e-commerce and enterprise resource planning (ERP)

Customers should then be profiled and segmented along demographic, financial and behavioral lines. Then, by recording their changing sentiments during various interactions with the company, a picture can be built up of how different segments progress through their customer journeys and it becomes possible to understand which interactions lead to greater customer loyalty and value, and which lead to churn.

Customer journey mapping helps companies to understand their customer needs and provide the kind of personal advice and support that builds trust.   Trust that encourages customers to buy more, stay loyal and spread good news about your business.

Mark Jenkins

Mark Jenkins has worked in the IT industry for over 15 years as a BI and Analytics consultant, and more recently as ROC Product Manager for Subex Ltd. He has designed and deployed solutions for global companies in many sectors including Insurance, utilities and telecommunications. Mark holds a BSc Hons in Computer Science from Manchester University (UK).

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E-mail : sandeep.banga@subex.com