Wikipedia, the free open content online encyclopedia has become a go-to source for information on almost anything and everything. Conduct a search for ‘Sponsored Data’ on Wikipedia and you come up with the following results “the page “Sponsored data” does not exist.”
Wikipedia seems to be oblivious of the new wave of customer engagement and the business model where you give free mobile data access to your customers or turn your mobile site to toll free content. By sponsoring your prospect or customer’s data use you gain
- Increased customer engagement
- Better experience
- Boost Sales
Sponsored Data enables Businesses to increase engagement with customers by funding the mobile data charges when visiting their site or mobile applications. This can increase traffic by more than 70% and maintain interactive relationship with differentiated experiences.
We have established in previous articles that customers are wary of consuming their data bundles watching videos, playing online games, syncing information and uploading photo download or stream. Telcos are on the other hand trying to stay competitive by coming up with all sorts of packages which aim at allowing their customers to do more online. So why not have Brands sponsor some of the data usage in return for the mobile subscriber to enjoy their product or promotion offering, for example watch their videos?
Amazon.com was the pioneer of Sponsored Data when it launched its e-reader Kindle in 2007, by offering free access to download e-books purchased form Amazon online store. It has led to increase of about 70% in sales of e-books.
- HOW SPONSORED DATA MAKES INNOVATIVE PARTNERSHIPS MORE REWARDING
In 2013, Chinese online retailer Alibaba partnered with China Mobile and China Unicom to provide zero-rated access to its consumer-to-consumer e-commerce app, Taobao, on Singles Day, a key shopping day in China. The carriers used targeted promotions to raise awareness of the offer among their near 1 billion customers, driving mobile sales to reach US$ 163 million and surpassing sales from the previous year in just 70 minutes. Alibaba continues to offer free access to its apps for China Telecom users and frequently engages with other carriers in short-term sponsored data campaigns to drive mobile commerce in targeted regions.
In Latin America, Tigo partnered with Netflix to offer Tigo customers a free 3-month subscription to the video streaming service (Netflix). This partnership enabled both Tigo and Netflix to expand their customer base demonstrating how Communication Service Providers and Over The Top services could work together to grow revenue. This innovative partnership demonstrates how cutting-edge operators like Tigo can leverage Sponsored Data to promote their offerings.
Sponsored Data is proven to drive engagement as consumers spend significantly more time on websites and apps, foster enhanced brand perception, increase click through rates and conversions, and as a result drive sales.
- HOW A BRAND (IN GHANA) INCREASED ENGAGEMENT BY 1000%
Nescafé was one of the first brands to test the service in the country to offer content that aimed to inspire young Africans to follow their dreams through the ‘Nescafé New Dawn’ campaign.
The two-week pilot was launched with a SMS text to 200,000 Airtel carrier users. It included a video link to a Nescafé TV commercial and informed users that viewing was free of charge.
In the A/B test, out of those subscribers for whom regular data charges applied, only 171 people watched the video, whereas those, for whom video was free to watch, were much greater in numbers – there were 1781 subscribers who clicked the link to watch. According to Roman Irurre, Nescafé Business Executive Manager for Nestlé in the Central and West Africa Region “brands are already using mobile devices to reach consumers effectively, through this new Nescafé pilot, we aim to inspire mobile-loving young Africans to pursue their dreams in an engaging, exciting and innovative way that is easily accessible and simple to use.”
- HOW YOU CAN CREATE VALUE WITH SPONSORED DATA
There are many different ways to create value with Sponsored Data services:
Customer service: With the growing trend toward online self-help, sponsoring mobile access to customer service can help companies significantly reduce costs with contact center services, as well as improve customer experience. Toll-free mobile data service also complements toll-free contact center services, which often block calls from mobile phones and are overloaded by high demand.
Websites: Sponsoring access can be a great way to drive traffic to a website—whether to induce e-commerce transactions or promote ad-driven models, such as in the case of editorial content providers looking to boost mobile ad revenues. For Mobile
Commerce websites, sponsoring mobile data is especially attractive as it encourages consumers to browse and purchase on the go, and can also be used as a reward for purchasing a product.
Mobile marketing: A common application for Sponsored Data is offering consumers free Internet access for viewing advertisements or brand information such as instructional videos. Companies may also offer users free Internet as a reward for viewing an ad or engaging with their brand.
Digital content delivery: Digital content can result in significant data consumption. By subsidizing mobile data costs for consumers (and possibly including them in subscription fees), digital content providers ranging from newspapers and magazines, to e-books, games, music and video streaming services, can drive adoption among consumers who might otherwise find the access cost prohibitive.
Hardware vendors: Selling Internet-ready devices with bundled data can be a great way to differentiate a product with complementary services. For devices attached to a specific service, such as Connected Home and remote healthcare monitoring applications, Sponsored Data encourages service adoption, without which the hardware has little use, creating a new revenue stream for manufacturers.
App developer: For app developers, sponsoring data to use the app can stimulate adoption of a new product. Moreover, since developers are getting paid for the content, it may be viable and prudent for them to pay for data on an ongoing basis. A Sponsored Data offer can also be an excellent marketing strategy, aiding discovery through positive word of mouth.
In-company use: Companies with many remote workers can reduce the cost of supplying employees with a mobile service and boost field force productivity by sponsoring access to tools such as productivity apps and the company website and Intranet. In all these applications, businesses are looking to increase the efficiency of their operations by offering mobile services. Sponsored Data provides these businesses with a tool for driving the adoption of their mobile services, which significantly improves customer satisfaction without demanding a large investment of money, time or effort.
A growing number of Communication Service Providers globally offer service plans that feature sponsored data and/or application zero-rating. The plans are successful, are beneficial to subscribers, and create a new revenue stream and a viable form of competition amongst Communication Service Providers. The cases we have studied establish the fact that Sponsored data connectivity is opportunity to create a win-win-win scenario for carriers, subscribers, and brands:
Operators: Unlock new mobile data monetization opportunities by offering data sponsorships opportunities.
Subscribers: Engagement with favorite brands is an amazing option for saving on subscriber’s data bundles.
Brands & Sponsors: Sponsors get new followers, fans and engage with a new target audience. At the right time, at the right place.
Would the Communication Service Providers in this part of the world embrace this new data model? Let us wait and see! Thank you for taking the time to read this article. I hope that you found it useful, and that it contributed to a greater understanding of Sponsored Data.
Have a fruitful week!
Source: Frost and Sullivan white paper ‘Sponsored Data: Connecting the Unconnected’.