The 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
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 ad-related 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."
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 ad-related data costs as a way to reduce the burden on consumers as well as put focus on improving data efficiency, Lentell says.