Marbella 2024

World Telemedia Marbella saw the issue of user acquisition rise to the top of the debate, but getting the right content and working with the right carriers and aggregators could very well make the telemedia sector even stronger.

One of the overriding themes of last week’s World Telemedia Marbella show was that of user acquisition. While the VAS content segment of the market is in rude health – and showing extraordinary growth opportunities across many regions, not least Africa and the Middle East – there is a growing worry that, with so many services all chasing the same eyeballs, cost of acquisition is rising and return on ad spend (ROAS) is declining.

This is particularly prevalent in games. As Tony Pearce, CEO of Reality+ – a blockchain based games developer – sees it, for smaller, niche players like him, the cost per install of games is now in the “tens of dollars” and is slowly becoming unviable.

One solution, he believes, is for smaller players to developed and incubate games and then licence them on to the bigger players who can afford the time and money needed to grow the spending user base to the levels needed to make money. However, this means diluting the revenues for these smaller developers.

Content conniptions

Meanwhile, Seriously Fresh Media’s Julia Dimambro believes that getting the right kind of content – and that means being ultra-niche – holds the key to better user acquisition in the content end of the VAS business.

In her view, picking a category such as Kenyan GenZ-ers who are into crocheting and serving up a variety of well targeted crochet content off the back of those ads not only targets the right people, but gives them what they wants – and it is so niche that ROAS is more healthy.

Here view was echoed across the show by many other speakers and exhibitors who all point to how getting eyeballs relies wholly now on really compelling content.

For some that is going niche, for others it revolves around pushing the limits of technology – Hungama being a prime example, offering immersive, 3D content (more of which next week).

All round, however, the key is to create the right content for the audience. That now involves looking locally and hyper-locally at markets and tailoring content accordingly – again using tech; this is perhaps where AI can really come into its own.

The role of MNOs

Perhaps, too, the answer lies in developing the role of MNOs. In many regions such as the Middle East, carriers play a much bigger role in disseminating content and VAS than anyone else bar Google. Perhaps this is a role they can expand and enhance.

For smaller players such as Reality+, maybe working with operators to target their ‘captive’ audiences can help get services in front of eyeballs on a different, less crowded and competitive platform.

Operators also have other ways to reach consumers, such as messaging channels and, to some degree, handsets and other means of reach. These are all worth exploring as ways to engage consumers, generate eyeballs and create a better level of ROAS for developers.

And one key way could be through messaging – particulary RCS.

RCS holds the key?

Rich communications service (PCS) is set to triple in traffic in the next five years, according to data out last week and it will be at the expense of SMS. According to data from Omdia collated for Infobip, RCS Application to Person (A2P) and Person to Person (P2P) traffic will increase from 1.5 trillion messages this year to more than 6 trillion messages in 2029. As a result, A2P RCS will generate revenues of $4.2 billion by 2029.

However, this growth is going to come at the expense of SMS, a separate study finds. According to separate figures from Juniper Research, SMS’s market share by value will reduce to 32% of global mobile messaging revenue over the same period, down from 45% in 2024.

But, the decline of SMS isn’t just down to RCS taking over. More, SMS is starting to be seen as too costly and too open to fraud. This is a worrying trend for MNOs, many of whom still make a tidy sum out of SMS.

For telemedia it offers both threat and opportunity. On the one hand, SMS based services – including PSMS – still make money for many players in many parts of the world. RCS is still to offer up a convincing business model for replacing this (although I am sure one will appear in due course). On the other hand, however, adopting RCS – in fact embracing the raft of OTT messaging services out there – creates whole new ways in which to make money and create new services.

In conjunction with the VAS community’s need for better user acquisition, there is an opportunity here for many to certainly look at how to create new acquisition tools that leverage the interactivity seen in RCS and OTT messaging.