Sprint to Offer Display App for Ads
January 26 2016 - 12:30AM
Dow Jones News
By Ryan Knutson
Some of Sprint Corp.'s prepaid customers will soon be able to
get $5 off their wireless bill in exchange for putting up with more
advertisements on their smartphones.
The option, available to customers on Sprint's Boost Mobile
brand, provides the carrier with an opportunity to experiment with
a new model of mobile advertising.
Subscribers who choose to download the "Boost Dealz" app from
the Android Play store will be frequently shown ads that cover
their entire home screen after they unlock their smartphones.
Users can dismiss the ads by pressing a button to indicate
whether they like or dislike the content, or they can click on the
ad to engage directly with the brand.
Telecom companies have spent billions of dollars building
ubiquitous high-speed wireless networks, but they have struggled to
profit from the advertising revenue flowing over them. Those
advertising dollars have largely gone to Silicon Valley firms like
Alphabet Inc.'s Google and Facebook Inc. Smartphones are becoming
increasingly important to the overall advertising market. In 2015,
spending on mobile ads is predicted to have surpassed spending on
desktop ads for the first time.
Digital ad tracker eMarketer estimates 52.4% of all digital ad
spending was on mobile in the U.S. in 2015, or about $30.5 billion.
Carriers have been trying to find a way into that market. Verizon
Communications Inc. took a step last year, paying $4.4 billion for
AOL, in large part for its advertising technology. The carrier also
launched an ad-supported video app targeted at young people, called
go90.
Sprint's move is just one step. The offer is only available to
customers with Android phones. Customers must choose to enroll in
the app and can turn it off at any time.
"We thought it was a very low-risk way to understand how this
type of value proposition would go over with our customers," said
Doug Smith, director of Sprint's prepaid product marketing. Mr.
Smith said Sprint set out about a year ago to find partners who
could help the carrier explore new opportunities in advertising.
Sprint is working with a startup called Unlockd to offer the
discount. Unlockd and Sprint share in the advertising revenue
generated above the $5 that is going to each customer. Unlockd
manages the ad inventory and sells it to brands and marketers. If
it goes well, Sprint may expand the offer to Sprint's broader
customer base, or increase the amount of money users receive for
interacting with the advertisements, Mr. Smith said.
"Who knows where this could go," Mr. Smith said. "We thought it
was important to start understanding consumer behavior and the
economics behind it."
Wireless companies are increasingly looking to supplement
slowing growth in their core business. There are more active
cellphone plans in the U.S. than people, and the market is about
77% penetrated by smartphones, according to comScore Inc.
"Carriers globally are really fundamentally changing their focus
to figure out how to get new revenue streams," said Matt Berriman,
CEO of Unlockd.
Unlockd has launched a similar deal with a carrier outside the
U.S., and says it is in advanced talks with others. Lachlan
Murdoch, co-chairman of News Corp, which owns The Wall Street
Journal, is an investor in Unlockd.
Write to Ryan Knutson at ryan.knutson@wsj.com
(END) Dow Jones Newswires
January 26, 2016 00:15 ET (05:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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