Rewarding someone who watches a video ad with free data? Sounds like an interesting new ad format. This was one of the ideas to emerge from MEF’s session at MWC on new business models for monetising mobile access in emerging and developed markets. Here are the highlights…

Sponsored data is back. Years ago, the premium content business trialled this idea. Originally, they called it ‘sender pays’ data. Now, brands and operators are once again experimenting with the concept.

They have different reasons. ARPU chasing operators see a chance to create data-free bundles and become destinations for content. Brands eye the opportunity to make a fair exchange for user attention.

Syntonic, the session sponsor, is a US-based/Australia-listed company whose Freeway by Syntonic platform enables app developers to reach, acquire, engage, and monetize consumers with sponsored data services. Syntonic’s platform includes the Freeway mobile app, where consumers can browse a catalogue of sponsored data content and rewards.

Syntonic’s Freeway platform also has an SDK for content publishers to enable sponsored data and rewards directly from within their own branded apps. The Freeway platform enables mobile carriers to provide sponsored data services. As part of its mission to raise awareness of the new access models of sponsored content, it hosted the panel session with MEF. The participants were:

  • Adia Sowho, Director, Digital Business, Etisalat Nigeria
  • Gary Greenbaum, CEO, Syntonic
  • Dan Rosen, Global Director of Advertising, Telefonica
  • Tim Sherwood, Vice President, Mobility & IoT Solutions, Tata Communications

The debate was moderated by Industry expert and tech consultant Chetan Sharma.

Here are eight takeaways from the conversation:

It could be the start of a new mobile ad format

Watch the panel in full

Imagine you have come to the end of your data allowance. You’re desperate for more. At this point a brand offers you the chance to claim a data top-up just for watching a short video ad.

It’s a no-brainer. High engagement for brands and a fair exchange for consumers.

Dan Rosen is a big fan. In fact, he believes it’s a new kind of mobile ad format – one the mobile industry could really do with.

“In Brazil, 30 per cent of customers hit a data wall data wall every month. Offering them a data reward is purely additive on all sides. It hits subscribers at the point of need, is very valuable for brands and doesn’t really exist anywhere else.

“I’d call it a new kind of ad format.”

Telefonica is trialling the idea in Brazil, Columbia, Mexico, Peru, Argentina and Germany.

chetIt could unlock brand advertising on mobile

Even today, 10 years after the first mobile ads, most of the action centres on performance or direct response campaigns. Brand building advertising is less established, even though it commands much bigger budgets.

Could sponsored data change this?

Rosen thinks it could. “There’s a big opportunity for brand advertising, which is the biggest ad market in world. You look at the statements Proctor & Gamble and others are making about the negative aspects of digital advertising, and you can see how (sponsored data advertising) can be a force for good – providing a better experience and performance rate.

But brands don’t know enough about the opportunity

The mobile ad space is busy to say the least. There’s immense noise and hype. The truth is, sponsored mobile content is a new idea, and most brands don’t know it exists.

“How can it be that we ask consumers pay for ads from their data plan? We zero rated ads at first, but somewhere along the way that’s been lost.

“I talk to brands about the idea and they ask why didn’t we know about this? The reality is awareness is low, so we need to change that.”

Operators are paying attention now

Syntonics’ founder Gary Greenbaum first approached operators with his sponsored data proposition three years ago. They were intrigued but lacked the incentive to act.

One thing changed that: the app store.

Suddenly phones became the access point for everything – music, social, news, maps etc. The carriers could only differentiate data on price.

So Greenbaum’s phone began to ring. “The value layer went from access to services,” he says. “Operators began to ask: how can we transition to becoming content providers?” Bundling data-free services and accessing brand marketing dollars is one solution.

It’s a viable alternative to paid app-installs

According to Gary Greenbaum, the makers of the world’s two billion apps spend a combined $100bn trying to convert users. The paid install is a common tactic. But experience shows an install doesn’t equal an active player.

Greenbaum says sponsored access can do the job better. “We’re worked with Reliance Entertainment in Indonesia and found that the cost of sponsoring 30 minutes of free play was the same as the cost of acquiring an install.”

A sponsored data ‘exchange’ could supercharge the space

Brands interested in sponsored content may be put off by the complexity involved in reaching multiple operators in multiple geographies.

Tata is trying to solve this. It has created a Sponsored Data Exchange that turns data into a commodity that can be swapped and exchanged.

Selling inventory is a new skill set for many operators

In developing markets, many operators lack the experience to engage with and sell to brands. And the other parts of the ecosystem are similarly limited.

Gary Greenbaum, CEO, Syntonic gives an overview of the sponsored data model

“It’s a new skill for us to sell inventory,” says Adia Sowho. We’re used to selling minutes. Meanwhile there are ad tech providers, but they are not agencies, and agencies who know how to sell to brands, but doesn’t understand tech. The go-to-market strategy (is hard).”

Sponsored data can cut costs for brands in other areas of business

Telefonica revealed that when a Brazilian bank made access to its app and web site data free, engagement went up by 80 per cent and downloads tripled. But more important: branch visits fall, driving efficiency and saving the bank money.

Get more Insights from MWC 17

For more from MEF events held throughout Mobile World Congress on check out the coverage of industry sessions, panel discussion and keynotes examining Consumer Trust, Sponsored data, Mobile Messaging and more.

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