Create new revenue streams with mobile advertising and reward programs
In my last blog, I shared some findings from Nokia’s Global Acquisition and Retention Study (2016) relating to churn and offered measures that service providers can take to reduce it by simply offering subscribers more choice and options with respect to their service plans. In this blog, I look at the topic of increasing revenue and customer satisfaction with innovative business models. Specifically, I’ll share some of the findings around mobile advertising and rewards programs and how they can be leveraged by service providers to reach a wider audience, promote network usage and ultimately generate revenue.
Consumers are open to mobile advertising if targeted to their interests
Our study asked users how intrusive they felt mobile advertising was and under what circumstances they would find it acceptable. It revealed that 52% of consumers globally felt that targeted advertising was intrusive (See figure 1).
Yet, consumers told us that they are still very much willing to receive ads if they were targeted and relevant. Our study revealed that up to 63% of consumers don’t mind receiving ads on their devices if they are in line with their needs and interests. This is particularly true for consumers in emerging markets. Interestingly, up to 58% would even be ok with receiving location based ads.
Clearly there is an opportunity to better leverage insights to ensure ads do match the profiles, usage trends and interests of their subscribers.
Linking ads to a rewards program: a winning proposition
Taking it a step further, subscribers are more willing to view ads if there are tangible benefits to them, such as collecting points as part of a rewards program. Per our study, 38% of consumers globally would be willing to receive advertising in exchange for rewards, such as free data (See figure 2). The percentage was even higher in transition markets, where up to 60% of users indicated that they are ready for this.
In this case, users could choose to receive free data in exchange for watching ads delivered by a third party. Here, each of the different players benefit. The advertiser gains additional eyeballs and can leverage insights from the service provider to ensure that users are shown relevant ads. In addition to improved customer satisfaction, service providers benefit from additional network usage and a new income source. The customer is happy to receive and use the “free” data. These programs have been attempted to some extent in developed markets, with the larger opportunity existing in emerging and developing markets with lower ARPU but higher consumer willingness to participate in rewards programs as noted above.
To find out how Nokia’s BSS and revenue management solutions can help you implement innovative business models and services, meet us at MWC (Hall 3, stand 3A10) or visit our Policy and charging portfolio website.
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