Sponsored Data Is The New Free Shipping

It’s hard to persuade people to download, watch, or listen to your digital content. One thing that might help persuade them, at least if they’re AT&T customers, is to offer to sponsor their data. Will it work? More importantly, will customers stick with it once the subsidy goes away?

It might help to compare sponsored data with free shipping. The latter was originally supposed to coax customers to shop online in the first place, then to choose one retailer over another. Customers got used to it, though, and now we’re more likely to spend more if that will help us achieve free shipping. Will sponsored data steer us to make different choices in podcasts, apps, and movie trailers if they can have the data they gobble while consuming these things subsidized, or (for prepaid customers) earn more data credit for doing so?

It’s too early to know. AT&T introduced the concept at the beginning of 2014, and it’s just now that companies to administer the subsidies, and advertisers and content providers are willing to try it out. Companies that have tried the idea on a small, experimental scale include Hershey’s as an advertiser, and Slate as a content provider. Slate offered to cover the cost of data to download their podcasts for two weeks, but it’s too early to know how this might affect listenership in the long-term.

It will be easy to determine whether the ads directly lead to increased data usage, and this idea won’t get off the ground if content providers don’t get what they want from users. “If it doesn’t increase the amount of time they spend on it, then we’re just spending money we didn’t need to,” the head of comedy video site Break.com explained to the Wall Street Journal. If the amount of time spent engaging with their content doesn’t increase in users who get free chunks of data to do so, why bother?

Will Free Data Become the Next Free Shipping? [Wall Street Journal]

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