Sponsored-data advertising a $23B opportunity for brands, wireless carriers: report by Chantal Tode

With a growing number of wireless carriers offering sponsored-data advertising opportunities to marketers, new research from Syniverse asserts that

brands and wireless carriers could unlock up to $23 billion annually by 2019 globally with sponsored mobile data services.

The report, which focuses on Asia, found that

62 percent of consumers in Asia are willing to accept branded content and advertising in return for free data access.

The key to unlocking the potential of sponsored-data advertising will be cooperation between sponsors and wireless carriers to deliver highly personalized offers that meet user expectations.

The research indicates that consumers, mobile operators and brands would benefit from sponsored data services said Mary Clark, chief marketing officer at Syniverse.

Consumers want to use more data along with richer mobile engagement, and marketers and mobile operators are missing out on the revenue that this usage could deliver.

While sponsored data offers considerable benefits for all involved, it is still a nascent market for which business models and relationships are being developed, she said. How quickly the potential market is unlocked will be determined by the ability of sponsoring brands and operators to work together to create personalized sponsorship offers that meet individual consumer expectations.?

A growing opportunity

In the United States, AT&T has been offering sponsored data ad opportunities since last year and Verizon recently said it will make such ads a part of its new mobile-first service for live and on-demand programming.

Wireless carriers are interested in this model as a way to help offset the cost of data usage, which continues to grow even as consumers express displeasure with having to pay for data, while also driving their own revenue opportunities at a time when SMS revenues are declining.

However, except for a few examples, brands so far have not jumped at the opportunity.

In the sponsored-data model, companies sponsor usage for specific content on behalf of subscribers of various mobile service providers, allowing subscribers to access this content without being charged for the usage.

Syniverse’s survey of 3,500 people in seven countries across Asia found that 49 percent of respondents would be willing to accept coupon offers from sponsors.

Entertainment offers

Respondents also would be willing to accept offers from a wide range of sponsoring organizations, with 42 percent saying they would accept offers from entertainment providers, 31 percent from bars, restaurants and cafes and 29 percent from travel companies.

In Asia alone, brands and wireless carriers have an opportunity to unlock up to $6 billion in revenue opportunity by 2019 by sponsoring mobile data services.

Insights uncovered by the research include that data-intensive content such as subscription video would see a 40 percent increase in use with sponsored-data advertising. Subscription-based music services would see an increase of 25 percent.

Other services such as free video, voice and video calling over data networks and online games would see moderate increases.

In terms of type of content, 43 percent of consumers are willing to accept sponsored branding or advertising in order to gain free access to Web sites for mobile Internet browsing, 41 percent to social networking services and 38 percent to free Web-based video services.

Sponsored data incentives are already happening in South Korea and the U.S., Ms. Clark said.

In these scenarios, brand partners, content providers and other entities support the cost of data to customers when accessing specific content or services.

For example, the Korean television-based home shopping program GS Shop partnered with SK Telecom to sponsor data incurred by customers’ usage, she said. Without increased data fees, consumers are incentivized to continue making GS Shop purchases from their mobile devices.

Originally posted on www.mobilemarketer.com