Would You Trade A Lower Phone Bill For Ads?

Danielle Beurteaux

How’s this for a deal: In exchange for ads and content being pushed to your phone, you get discounts on your bill and/or free data.

That’s the business model of Australian telco startup Unlockd. The company just raised $12 million (that’s $15 million in Down Under money) in investment; the money will be used to expand to new markets in Asia and the UK. Unlockd’s first market was Australia in 2015, followed by a partnership the U.S. with Sprint brand Boost.

Consumers have a complicated relationships with digital advertising. Or maybe it’s not that complicated—consumers don’t like the ads. According to a recent report from eZanga, most users avoid them, with the exception of those in the 14 to 17 age range. The older the user, the less tolerance they have for ads. And in a true ouch! moment, 75 percent only click on ads accidentally. Of all ad formats, video is viewed most favorably.

Another survey, this one from Accenture, found that 61 percent of respondents know about ad blockers, and nearly half would pay to avoid ads altogether. Further, 84 percent said there are excessive amount of digital ads. (A side note: Users in developing economies are both more aware of and more likely to use ad blockers.)

Outgoing chief of the FTC Julie Brill blames the ad tech industry for its own woes and the rise of the ad blocker, pointing specifically at the lack of Do Not Track standards.

Consumers might dislike digital ads, but investment in them remains on the rise. According to the Interactive Advertising Bureau, spending in 2015 hit almost $60 billion, a 20 percent increase on the previous year.

So what will fix the mess that is digital ads? One prediction says 2016 is the year we’ll see “contextually relevant ads” and “hyper-personalization.” But that’s no guarantee consumers will welcome what most see as intrusions into their personal tech space. Can Unlockd, or a similar model, get consumers to change their minds?

Right now, the Unlockd system (which is currently available only for Android devices) serves up a full-screen ad every time a user unlocks their phone. If the Boost plan in the U.S. in any indicator, that means up to 50 ads each day (although you can close an ad). You must use Unlockd for 30 days before you get any rewards. That’s potentially 1,500 ads a month—a lot of advertising for a $5 (or even $10) rebate.

Maybe this will all be a moot point eventually, especially now that we have ads that can look back at you and change according to who is doing the looking, batching people into consumer segments based on things like gender and age.

My only question: Can they detect a scowl?

For more insight on digital advertising, see Marketers Frustrated With Digital Advertising ROI.

Danielle Beurteaux

About Danielle Beurteaux

Danielle Beurteaux is a New York–based writer who covers business, technology, and philanthropy. Her work has appeared in The New York Times and on Popular Mechanics, CNN, and Institutional Investor's Alpha, among other outlets.