You have to wonder what AT&T is thinking. The lead article in The Wall Street Journal (sub req’d) Media & Marketing section on Friday was titled, “For AT&T, Ad-Sales Success Is No Cinch.” No kidding. Essentially AT&T announced plans to start selling advertising on “three screens”: TVs, computers and mobile phones. The article has this sort of breathlessness about it, as if AT&T has this brand-new idea, will now implement it and will soon be raking in billions of dollars in advertising revenues. Scott Helbing, who is AT&T’s executive vice president of entertainment services said, “we have never aired an ad or trafficked an ad or measured an ad’s effectiveness, all the things you have to do to be in the ad business…”
AT&T’s decision to tell the world about its plans is a combination of a short memory, hubris and wishful thinking. As Greg Sterling wrote in his blog, “size does not automatically equal success.” I am surprised that more bloggers haven’t written about this effort. In fact, the people who were quoted in The Wall Street Journal were gentle in assessing the potential for AT&T. “It remains to be seen whether (AT&T) can do very quickly what it has taken the other guys a long time to build,” said Steve Calder, executive media director at Mediahub. The solution is simply not the large and competent Yellow Pages advertising sales force. They have their own challenges.
To lead this effort, AT&T brought in “a 25-year advertising veteran who joined AT&T last April after a stint as president of advertising for an in-hotel video service.” Karl Spangenberg may have one of the toughest jobs in media. To begin with, the company only has a few thousand television customers. It has a large number of broadband advertising clients, but lots of competition. And the WSJ article says that Forrester Research determined that “79 percent of U.S. consumers are annoyed by the idea of mobile marketing.” But Mr. Spangenberg’s major challenge will be the environment and the culture of the new AT&T.
And that’s just the beginning of Mr. Spangenberg’s problems. AT&T seems to have given him a budget to hire 100 salespeople by the end of the year. That’s nearly a year away and, more important, that’s the number that AT&T needs just to test one major market. In my view, AT&T should keep its cards close to the vest for a major initiative like this until it has a meaningful market position. Just because it has a Yellow Pages sales force does not mean it is going to succeed in the rough-and-tumble business of selling advertising on multiple channels.