Anonymous data monetisation is the way forward – but who will get there first?
Before we make any predictions for the future, let’s examine the lessons of 2016. If the mainstream media’s obsessions match those of the public - which is their job - then privacy became an increasingly important in the last 12 months. Fears over the sovereignty, security and privacy of personal information were rarely out of the news.
The year 2016 taught us that intrusive marketing, Big Brother-style surveillance and irresponsible data losses are big issues with the public. They still hunger for information and entertainment on their mobile phones and the relationship with their handsets is ever more intimate, but intimacy goes hand in hand with trust. The good news is that it’s not so much the gathering of data that concerns them - otherwise surely subscribers would not keep volunteering their personal details en masse, to thousands of service providers - but the abuse of that responsibility that is making them lose trust. This is why there is a boom in demand for non-personal data, and why anonymous data monetisation (ADM) will be one of the most important growth markets in 2017. It’s not chump-change either. Seven-figure annual contracts are being made with app publishers for anonymous location-based data, which has a high value to the mobile telecoms sector.
Meanwhile, another trend of less concern to the general public was the fall in revenue for games developers as it became increasingly difficult to persuade clients to pay. As the shifts in online advertising continue to concentrate power in the hands of the biggest, most globally omnipresent content providers, this has dealt the mobile developers a double whammy.
If these three trends persist into 2017 - and their momentum suggests that they will - then games and apps makers will have three potentially diminishing sources of revenue. On one hand they can sell their apps for an upfront fee, which is increasingly difficult in the days of freemiums and volatile shifts in demand. On the other hand, the freemium model, which involves giving away software in the hope of enticing users to pay for upgrades, is proving challenging and highly competitive. The third option, advertising, is getting harder to keep up with. The good news is that there’s a fourth option emerging and it could be a lifesaver. It’s not chump-change either. Seven-figure annual contracts are being made with app publishers for the collection of anonymous location-based data.
Just as the public demands that more of the data relating to them is sanitised, there has been a boom in demand for anonymous location-based data from the mobile industry, in particular mobile telecoms companies, who are seeking insight on mobile network coverage and mobile performance. At the same time, there is a growth in demand from advertisers who increasingly want to use location-based targeting as part of their campaign efforts. Companies like Uber creating demand city by city have shown the successes to be gained by using this approach. Naturally, the transport giant’s marketing team is likely to pay far more on a pay-per-click basis to target specific geographies as opposed toa broader and less focussed campaign targeting an irrelevant audience. This in-turn creates higher display and PPC revenues for the mobile app publishers displaying the ads.
One of the reasons that ADM is expected to boom in 2017 is that it hits the sweet spot between three sets of aspirations: the need for advertisers to target audiences based on location, the demand in the mobile and telecoms sector to better understand and improve network coverage and the desire for mobile content publishers (such as games and app developers) to find new ways to make money. When these three tributaries combine, they form a powerful revenue stream.
Many app developers don’t have the capacity for providing or monetising this information on their own, so how quickly can they get on board? A games developer, for example, could insert code into its existing apps which would collect anonymous location-based data from users in the background. Since this information relates only to the location of the cell that the mobile device resides in and no personal or unique device identifiers are collected, no privacy issues are raised. However, the simple addition of this data reporting capacity adds massively to the value of the software.
It is for these reasons that our top three predictions for mobile monetisation in 2017 are:
- Advertisers will increasingly wish to target their audience, including by location
- As a result, location-targeted advertising will increase in value, while non-location targeted advertising will decline
- As a byproduct, anonymous location-based data can be collected, generating even more revenue for mobile app publishers, through ADM, which will become the fourth major revenue stream for mobile apps.
Many mobile app developers could significantly raise the value of their company in the several hours it takes to incorporate some code from an enabling ADM partner. They can tap into this new revenue stream almost instantly, without any investment in finding and hiring programmers, developing new platforms or setting up the marketing and sales resources required to monetise the data.
With application developers and publishers needing money, the mobile industry seeking anonymous location-based data and advertisers crying out for greater geographic targeting capabilities, ADM is now being powered a swell of energy. If you can catch this wave, it could be a life affirming surf for the next couple of years.
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