DATA COST CRI­SIS

Most mo­bile con­sumers aren’t aware that ad­ver­tis­ing forms a big part of their data costs, and the con­cern is that the cur­rent high cost is a bar­rier to en­try for many want­ing to ex­pe­ri­ence the ben­e­fits of the In­ter­net and mo­bile tech­nol­ogy

Financial Mail - - MEDIA & ADVERTISING DATA - Jeremy Maggs jmaggs@iafrica.com Gour Len­tell

The mass mar­ket’s abil­ity to ac­cess in­for­ma­tion on­line is in­creas­ingly be­ing com­pro­mised by pop­u­lar web­sites that “chew data” be­cause of ex­ces­sive ad­ver­tis­ing.

And, says Gour Len­tell, CEO of cloud-based mo­bile spe­cial­ist binu, this is an is­sue pub­lish­ers and ad­ver­tis­ers are not pay­ing suf­fi­cient at­ten­tion to.

The com­pany has just com­pleted a re­veal­ing study that shows how much data is taken up by ad­ver­tis­ing on SA’S top 20 web­sites. For in­stance, on the Daily Sun and Su­per­sport web­sites ad­verts eat up as much as 81% of data. On IOL it is 76%, on Dstv 7% and on Au­to­trader 21%.

Says Len­tell: “We’re ex­pe­ri­enc­ing a data cri­sis in SA where the cur­rent high cost is a bar­rier to en­try for many want­ing to ex­pe­ri­ence the ben­e­fits of the In­ter­net and mo­bile tech­nol­ogy. The high costs mean the broader, less af­flu­ent mass mar­ket — which many brands and ad­ver­tis­ers wish to reach — sim­ply can­not af­ford to go on­line, surf the In­ter­net and down­load and use apps cre­ated for them. For ex­am­ple, browsers vis­it­ing the Daily Sun web­site are un­wit­tingly us­ing 81% of their data on that site visit on ad­ver­tis­ing alone.”

Len­tell says that while mo­bile con­sumers are gen­er­ally aware that video is ex­pen­sive and con­se­quently re­strict their con­sump­tion, most don’t know that ad­ver­tis­ing forms a ma­jor com­po­nent of their data costs.

“Most con­sumers would be sur­prised to learn that ad­ver­tis­ing ac­counts for be­tween 60% and 80% of their data costs when brows­ing pop­u­lar web­sites.”

Len­tell is also con­vinced that brands — which are con­tin­u­ally ex­horted to em­brace a larger on­line ad­ver­tis­ing strat­egy — are gen­er­ally un­aware of the po­ten­tially neg­a­tive sen­ti­ment they are cre­at­ing by mak­ing con­sumers pay a high price for the data used in view­ing their ads. And that is not about to change soon.

“There is lit­tle or no eco­nomic in­cen­tive for ad­ver­tis­ers or pub­lish­ers to think about adrelated data costs be­cause the tech­nol­ogy pro­cesses be­hind on­line ad­ver­tis­ing de­liv­ery are far from data ef­fi­cient, and most on­line ad­ver­tis­ing is de­signed to max­imise the dis­play size, with end users pay­ing the data costs in or­der to in­crease click-through vol­umes.”

Re­verse billing

Len­tell be­lieves that if ad­ver­tis­ers had to ab­sorb some or all ad de­liv­ery data costs, more at­ten­tion would be paid to bet­ter and more ef­fi­cient ads, which might even re­sult in bet­ter con­ver­sion rates. So one ques­tion

con­sumers might ask is, could me­dia com­pa­nies or even ad­ver­tis­ers carry some or all of the costs them­selves?

Len­tell says mo­bile net­work op­er­a­tors have re­cently in­tro­duced re­verse-billed data prod­ucts where data con­sump­tion is billed di­rectly to the en­ter­prise. In sim­ple terms, re­verse billing makes mo­bile con­tent data free for con­sumers, and con­tent providers pay the ag­gre­gate data costs.

Re­verse billing, he says, could equally be ap­plied to data de­liv­ery costs of In­ter­net ad­ver­tis­ing. If cer­tain mo­bile net­work op­er­a­tors can zero-rate and re­verse-bill mo­bile data us­age from nom­i­nated IP ad­dresses, would it not be rea­son­able for a gi­ant ad plat­form like Google to fund adrelated data costs as a way to re­duce the bur­den on con­sumers as well as put fo­cus on im­prov­ing data ef­fi­ciency, Len­tell says.

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