Telefónica eyes potential for opening up ‘sponsored connectivity’ products for advertisers

Telefónica is eyeing ways to diversify its ad products which could see it open up “sponsored connectivity” packages for brand advertisers.

This could give brands the option to provide a customer with a preferential or free amount of mobile data in exchange for their engagement with some of their content, according to Telefónica’s new global ad director Daniel Rosen.

Speaking to The Drum at Mobile World Congress in Barcelona, three months into his new role, Rosen said that plans for new ad products and services are underway, and that there could be the potential for these kinds of value exchange-based opportunities for advertisers. “We are still looking into it but there is a potential for a real value exchange between customers, advertisers and mobile operators,” he said.

Rosen also marked out the rise of programmatic trading – both direct and auction based – as the increasingly dominant method of buying and selling inventory, and therefore prominent trend in the mobile landscape.

Telefónica made its first foray into the programmatic arena last year, partnering with Axonix, which is joint-funded by Telefónica and affiliates of Blackstone’s GSO Capital Partners, to create a mobile-only ad exchange.

He referenced the growth of its mobile-only programmatic exchange partner Axonix as going “from strength to strength”, with it serving around 2bn monthly impressions.

Location-based targeting has fuelled much of the growth in mobile programmatic but location fraud remains rife, and this lack of data authentication is one of the biggest barriers to brand spend, according to Rosen.

“Location fraud in digital media is a problem, therefore authenticated location data is a coveted asset for media.”

This is where Telefónica regards itself as a “trusted custodian” of its location and first-party data, making it a compelling sell for advertisers, according to Rosen. “Data comes with a unique layer of responsibility and so we see ourselves as the trusted custodians.” He later added that “the onus is on us to work double as hard to be transparent with customers about how we use their data”.

Meanwhile he also said that opportunities around dynamic creative are not yet being grasped by advertisers and agencies, and that future trends will fold around social media, mobile, sensors, location, and data.

“Clients are really working hard towards things like real-time marketing now, because they are recognising the power of dynamically serving ads to people in real time, and if you do that you are delivering highly relevant content that is designed to make people’s lives easier – it’s the age of context.

“Advertisers must really grab hold of that, and that’s where we must work harder on the creative side. One of the challenges on the creative side is to grab the data created around these [location] sensors – around who you are, what device you’re on, where you are – to deliver the right content. That’s where dynamic content creation can really happen, and it’s a really interesting trend. But it’s not until the creative side of the business works with this kind of content creation that they will be able to get most out of mobile creative.”

Previously Rosen told The Drum that Telefónica, which already has a machine-to-machine arm, will play a pivotal role in powering of the internet of things (IoT) and wearable devices.

He added that this period of connectivity remains fledgling, and as such, has spurned a lot of “silliness” with products such as connected milk jugs and toothbrushes, which he dismissed as fads. However, he added that the IoT market has now reached the stage where businesses are creating connected products which “really resonate” with consumers, such as connected cars.

Rosen also stated that his side of the business would not be affected by the impending sales of O2.

Rosen previously held the role of global chief executive of WPP-owned mobile agency Joule, and prior to that was head of mobile at AKQA.

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