DCI Online – Telecomunicações – 17/05/2018
The challenges Brazilians face to avoid not running out of mobile data and the huge number of pre-paid phones in the country (61.5% of the total in March) opened the doors for the arrival of new apps with sponsored data – mostly offered by banks and retailers.
The largest phone operator in the country, Vivo informed DCI that its revenue from advertisers using sponsored data campaigns jumped 280% in 2017 compared to 2016. At MUV (advertisement agency specialized in mobile marketing), “ten projects of [sponsored] data are being implemented” at this moment, including two for financial institutions, according to its CEO, Marcelo Castelo. For the American technology company Datami, creator of solutions for sponsored mobile data, 80% of the new businesses in the last four years were in the Brazilian market.
“Sponsored data is an evolution of the ‘800’ services, or a direct channel with the client that works very well for retailers, banks and insurance companies, among other segments, said Mariana Oliveira, Datami’s Sales Director in Brazil. “The goal is to make the user browse with no worries”, added Castelo, from MUV.
The two companies started working together in sponsored data projects in Brazil in 2016. Since then, large brands like Santander, Liberty Seguros, Natura, Magazine Luíza, Netshoes and Mercado Livre already used their services.
This month, Casas Bahia, a chain of electronics and furniture stores, adopted the model. “We realize the convenience that [the service] provides to the customer, who can browse, buy and wait for the delivery, or buy [online] and pick up the product at a store”, said Julio Duram, Product Director at Via Varejo, the chain’s owner. Also in May, HDI Seguros, an insurance company, started using the service and followed “the trend that we noticed in other markets and that is becoming a differential for the consumer”, according to Paulo Moraes, the firm’s Marketing Director. In both cases, MUV and Datami worked together to provide the service.
Duram, from Via Varejo, admits that the investment for this type of action “isn’t cheap”. “But it is clear that we will have a good return with this practice”, added the executive, showing optimism.
Contrary to social networks like WhatsApp and Facebook – that have sponsored data as a commercial hook by the mobile companies –, advertisers who offer sponsored data pay the phone operators. In Vivo’s case, “the sponsored data solution is sold by Vivo Ads’ sales team directly to advertisers”, according to the head of the division, Lucas Amadeu
“It is like a corporate acquisition. There are price charts different at each [operator], says Marcelo Castelo, from MUV – which also works as a “bridge” between advertisers and the telecom industry for other formats of mobile advertising, such as data rewards.
The founding partner of MUV – which was born from a spin-off of other Brazilian digital agency, a F.biz – told DCI that companies that adopt data sponsorship “don’t want to let it go after they understand its benefits”. Two campaigns done by MUV were recently renewed and will be extended to 2019.
If in the beginning MUV had to contact directly the engineering department at each of the phone operators, the scenario changed after the partnership with Datami. With its roots in Boston, in the United States, and incubated at Princeton University, the start-up “already has partnerships with almost all phone operators in the Americas”, according to Mariana Oliveira. Additionally to the partnerships in Latin America, the company has agreements in India, Indonesia and some countries in Africa.
“With [Datami’s] technology, we managed to offer the free data in an easier way”, adds Castelo, explaining, however, that the advertiser can only offer sponsored data with one or two operators, even though the majority of them try to close deals with all large operators.
With the popularity of this business model, the ad agency is planning to launch the service in other markets such as Mexico, where MUV already operates, and Peru, Argentina and Colombia where companies are already negotiating [sponsored data campaigns].
One of the pioneers of the sponsored data [sponsored data model in Brazil was Bradesco which started using it in 2014. Since then, Banco do Brasil and Banco Santander also offered the benefit.
“Banks are very interested in the solution because [the free data] accelerates the clients’ migration from traditional channels (branches and call centers) to digital services. This is an increasingly strong trend”, informed Amadeu, from Vivo Ads.
“There is also interest in the e-commerce sector as the user tends to access for longer periods of time and more often with sponsored data”, he adds, reporting a 30% increase in the average use during the first three months of the service implementation.
In Natura’s case, data sponsorship went beyond the final consumer and to the sales people too – allowing sponsored data even for Point of Sales (POS) hand devices used for charges. Around 600,000 sales representatives are already active on the platform.
“We counted an increase of 10% in the average productivity, but the most important was the possibility to train [sales people] remotely using videos, for free”, said Natura’s Digital Innovation Director, Luciano Abrantes.
Amadeu believes “that the growth potential for sponsored data in coming years is big because the market is still in a maturing phase, discovering the solution and its benefits”. According to a study released in August of 2017 by the consultancy company Kantar Millward Brown, the percentage of Brazilians that already used sponsored data had reached 22%. And another study by consultancy firm Deloitte, revealed that eight in ten Brazilians end up with no mobile data each month (see chart).
Pie Chart (top)
Title: Brazilian consumers who already benefited from sponsored data campaigns – in %
Key: Yellow = Yes; Blue = No
Eight of ten Brazilians run out of mobile data each month
Stack Bar Chart (below)
Title:Experience feedback – in %
Key: Blue = Good/Great; Orange = Indifferent; Gray = Bad
Brazilians have trouble controlling data usage
Sources: Kantar Millward Brown and Deloitte