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Sponsored data an important new mobile marketing opportunity for big brands

Consumer packaged good brands, retailers and film studios top the list of marketing verticals likely to quickly jump at the opportunity to sponsor mobile data use via a breakthrough new program announced this week by AT&T. 

AT&T got a first-to-market advantage this week with the launch of Sponsored Data and is the first carrier-supported advertising option to tackle the growing data issue as consumers continue to push the limits of their data caps by devouring media. Other carriers are likely to follow suit with similar programs, promising to make Sponsored Data an exciting new mobile marketing opportunity this year.

?The first, obvious place this makes sense is for companies whose products/services are data-intensive: Content and entertainment companies,? said Josh Engroff, chief digital media officer at Maxxcom Global Media?s The Media Kitchen, New York.

?There is massive consumption of streaming video and music on mobile devices these days, and that is only going to grow,? he said.

Sponsored opportunities
All of the four main carriers have been talking about sponsored data for the past couple of years, but AT&T is the first to actually deliver on the promise.

The new technology will let marketers pay for consumers? data fees in exchange for sponsoring a piece of content served over a mobile site, application or service.

With consumers nearly devouring all lengths of video and media entertainment from smartphones and tablets these days, entertainment companies are the logical first vertical to leverage this new tool.

For instance, a major film studio or broadcaster could sponsor the first ten minutes of a movie or television show so that consumers do not have to worry about draining their data limit.

At the end of the sponsored data, a call-to-action could drive consumers to add the TV show to a phone?s camera or drive traffic to a movie ticketing site to increase pre-sale ticket sales.

Additionally, TV broadcasters that air content during the middle of the day when consumers are not near Wi-Fi connections could benefit significantly.

?Think about the NFL, ESPN or Nike allowing their fans to watch highlights or full games without the risk of going over their data plan, courtesy of a brand,? said Steve Knapp, director of market strategy and senior partner at Carmichael Lynch, Minneapolis, MN. ?To me, this is great.

"The opportunities are almost endless," he said.

Additionally, a fashion retailer could offer consumers a coupon or prompt a download of a branded mobile app from leveraging sponsored data.

Moreover, a brand could layer a sponsored data ad on top of an in-app campaign to encourage consumers to download a social or game app.

At the same time, there are challenges around promoting sponsored data since it is limited to one carrier.

Additionally, marketers need to weigh the differences between branding and conversions when using sponsored data.

?Does the impact on conversion or actual sales outweigh the investment?? said Derrick Lin, brand strategist at Resource, Columbus, OH.

?Some engagement types do take larger amount of data than others, and the long-term investment could be a burden, especially when mobile budget is still a burden to many marketers,? he said.

Battle of the carriers
At the same time that AT&T is rolling out sponsored data, the battle between the carriers seems to be escalating this year with aggressive marketing urging consumers to switch their carriers.

In particular, T-Mobile and AT&T have been duking it out to win consumers over by loading features into contracts and offering new devices.

For example, T-Mobile has added support for Apple?s iPhone and has been pushing a program that lets consumers frequently upgrade their devices. 

Mobile data is a growing concern and selling point for consumers as they burn through more data to stream movies, music and television shows. This new deal could give AT&T an opportunity to pull ahead of the competition if enough advertisers back sponsored data.

At the same time, the deal gives AT&T the ability to hike up taxes for companies that choose to leverage its services to connect with consumers. This could significantly limit the number of advertisers that can afford to offer the service.

Three companies have initially signed on with AT&T?s sponsored data program: UnitedHealth Group, Aquto and Kony Solutions.

According to an article in the Wall Street Journal, UnitedHealth Group will pay the data fees that consumers make when accessing health-related apps and sites.

Becoming the defacto factor
Now that AT&T is the first to roll out sponsored data, all of the other carriers will likely follow suite.

Carrier-supported sponsored data has traditionally been held up by forming partnerships with marketers.

At the same time, marketers are under increasing pressure to make mobile advertising useful to consumers as more media usage takes place from their handhelds.

Offering consumers free data in exchange for interacting with sponsored content has an obvious value attached to it and could eventually become a standard advertising option from the carriers.

"I do believe this will become the norm," Mr. Knapp said. "AT&T just got there first.

?I see parallels to native advertising and sponsored social posts,? he said. ?Once Buzzfeed and Facebook rolled out their sponsored ad programs without huge consumer backlash, others followed in suit."

Final Take
Lauren Johnson is associate reporter on Mobile Marketer, New York