Troubled tycoon and founder of Mega, Kim Dotcom, once proposed a disruptive advertising model intended to challenge Google. His idea involved installing software on users’ PCs so advertisers would pay consumers directly for their time, instead of funneling revenue to Google or other major online advertisers.
At Mobile World Congress, Telefónica presented a similar concept from a telco perspective. The company’s head of advertising, Daniel Rosen, revealed trials and said, “We are starting to pilot the area of sponsored data.”
Under Telefónica’s proposal, brands could reward consumers with data allowances in exchange for small actions. For example, a user might receive 1GB of high-speed 4G data for spending 15 minutes completing a survey, or a smaller amount of data for watching a short video advertisement. This approach offers a clear quid pro quo: consumers receive tangible value and may view participating brands more positively rather than feeling annoyed by intrusive ads.
Data privacy and transparency will be central to consumer acceptance. One major concern is how personal information will be used after a brand delivers sponsored content. Rosen emphasized that Telefónica intends to protect customer data and make any data collection transparent to prevent future distrust.
Emerging ad technologies such as Bluetooth beacons could further expand how sponsored data is applied. For instance, a brand at a tourist attraction like the Eiffel Tower could partner with a local operator to offer data credits that let visitors upload photos and share experiences. In that scenario, users benefit from free or discounted connectivity, brands gain exposure, and operators generate new revenue streams.
Marco Veremis, CEO of Upstream, cautions that sponsored data solutions must be device-agnostic to serve markets where feature phones remain common: “Telefónica’s sponsored content trial will be interesting to follow in ‘mobile first’ markets in Latin America and in China. Operators rolling out digital content to their users need to be careful how they implement it, especially in growth-potential markets where a high number of users do not have Android or iOS smart devices.”
He adds that a device-agnostic strategy can engage a wide range of users by delivering text-based content like surveys while still offering richer media experiences to smartphone users regardless of the operating system.
Localization is another key factor Veremis highlights: “Telefónica must ensure that any content it shares is localized and relevant to the end user. Differences between markets can be marked and a ‘one size fits all’ approach to content in growth markets will not be as effective as demonstrating sensitivity and knowledge of the local market.”
Rosen did not disclose the exact locations of the trials, but Telefónica operates across Western Europe, Latin America, the UK through O2, and has a partnership with China Unicom, suggesting trials could appear in any of these regions.
Do you think ‘sponsored data’ is a good idea? Let us know in the comments.