How Does This Sponsored Data Thing Work?
This week AT&T announced a new program, Sponsored Data, that allows a business to foot the data bills when consumers view its content on their mobile devices.
A trio of companies--mobile marketing startup Aquto, ad developer Kony Solutions and health care company UnitedHealth--have partnered with AT&T. The telecom announced that anytime sponsored content pops up on a user’s device, an icon that indicates the content won’t eat up the user's data allowance will accompany it.
The goal of the program is to fix a major problem that has developed since smartphone usage has become so ubiquitous--the inability of marketers and advertisers to reach consumers who are sensitive to data usage.
"What we have determined is that about half the users actively quit the app if they see a mobile video ad coming because they know it is going to consume their data plan," says Susie Riley, founder and CEO of Boston-based Aquto. "Then there is about another 30 percent more users on top of that [who] will--depending on how much they want to see the content--sometimes quit because they don’t want to consume data. What this does is it defeats the purpose of people showing video mobile ads."
Marketers will be able to pay AT&T directly for the data consumers use when they watch videos or use mobile apps, and can reward users with data added to their AT&T plan. "People are sensitive to their mobile Internet consumption and so they like that the reward is relevant currency, plus it is instantaneous. It is frictionless," Riley says.
Riley says that Aquto will essentially act as a middleman between marketers and AT&T. Aquto is now in discussions with interested businesses about Sponsored Data. The company had previously worked with businesses in Europe to provide rewards to users through other carriers.
Riley disputes that there is a danger with AT&T's program that big companies with larger purses will be able to sponsor a disproportionate amount of content.
"One of the misconceptions out there is that this will be used by the Googles of the world to dominate the mobile Internet and that’s really not the case," she says. "I think it’s the little companies...that will innovate and use this as an advantage and provide more value to end users."