BARCELONA, Spain—Would free data be enough of an incentive for people to turn off their ad blockers?
With all the chatter about what Apple's ad-blocking technology means for the fate of publishers and media companies, one startup at Mobile World Congress has an enticing pitch for marketers—fork over free mobile data in exchange for clicking on an ad.
Aquto works with carriers and brands to create ad units that offer consumers free mobile data for interacting with advertisers. To be fair, Aquto has been around for a few years, working with brands like Hershey's, Coca-Cola and carriers including AT&T to power campaigns, but with the rise in ad blocking and concerns about how much data mobile ads eat up, the Boston-based tech company's business model seems particularly intriguing this year.
During a panel with execs from Google, Bank of America, MediaLink and Syniverse today, Susie Kim Riley, founder and CEO of Aquto, said that despite the rise of data plans in the U.S. and Western Europe, research shows that consumers are constantly trying to cut down on their data use.
"At any point in time, about 60 percent of users are trying not to use their cellular data [and] are hopping over to Wi-Fi to avoid those overages," she said. "Because of that sensitivity, what we find is that when content can be delivered to the user free of data charges, the content engagement goes up two- or threefold."
That's partly because mobile ads suck up loads of data from users' plans. Riley cited a recent investigative piece from The New York Times that claimed consumers pay up to $9.50 worth of data on ads per month, depending on the publisher and ad format.
"Why do you think people are blocking ads? It's because it's a poor user experience," Riley said. "There's latency because it's fetching things from lots of different places, but in addition, it's chewing up your bandwidth."
Outside of regions like the U.S. and Europe, Riley said that roughly half of mobile users don't have data plans, making them particularly receptive to free data. In those countries, brands often give people coupons they can redeem for data on their phones.
Lou Paskalis, svp and enterprise media executive at Bank of America, also spoke on the panel and didn't say if the financial brand was testing sponsored data. But he made it clear the move toward ads that offer consumers a reward for engaging with content is welcome from brand marketers.
"If someone's on LTE or 4G, don't serve them a video—figure out a different way to serve a message other than video," he said.
"Advertising by its nature is disruptive—what we need to do as marketers is add value to experiences to enhance what people are doing," Paskalis added. "We need to think about how do we pick up a signal set based to understand the environment, the need, the mindset and the motivation and have that offer, message, compelling utility ready to go at a moment's notice."
As an example, he addressed a recent Bank of America campaign that turned social media posts created at the World Economic Forum into ads, plugging quotes and six-second videos into tweets and Vines that were then pushed out as paid ads.
"We're essentially using ad inventory as notification for content that you're interested in," Paskalis said. "Those marketers that are taking the banner baggage of the digital era and trying to put it into a smaller device are going to lose really big."