The Rise of the Toll-Free Data Initiative [and why it matters]

In Big Data by Shelly KramerLeave a Comment

The-Rise-of-the-Toll-Free-Data-Initiative-and-why-it-matters (1)I was reading an article reporting on Verizon’s plans to start testing “sponsored” or “toll-free” data in the near future and it got me thinking. Why does this matter? Toll-free data? Do we need that? The more I thought about it, the more the rise of the toll free data initiative started to make sense—especially as a marketer. Here’s why.

Think about toll-free 1-800 numbers and their heyday. People (read: consumers) often didn’t want to have to pay for the cost of a long distance phone call to get something they needed, whether it was to buy something, to ask a question about potentially buying something, or to get customer service. It annoyed the heck out of them if they had to call a company on their dime (remember when phone calls cost a dime? OHMYGOD I am old!!!). As a result, companies pretty much had no choice but to adopt the use of the 1-800 number to overcome that barrier.

Will Toll-Free Data Mean More Content Consumption?

This move by Verizon (and being beta tested by AT&T for several years now), allows a third-party to cover the cost of any data used while accessing its content, instead of it counting against the subscriber’s monthly data cap.

Think about it: More and more brands are producing rich media content and developing apps designed to appeal to consumers in some way or another. And, naturally, they want consumers to be attracted to and consume that content and/or use those apps. However, right now, doing so includes a mobile data consumption “price” that the consumers must bear. Much like that long distance phone fee of the past, when people have to think about whether or not to do something based on what the cost to them is, sometimes they opt out. But adding this “toll-free” functionality to rich media content and apps removes that barrier.

I’ll admit that I never think about my data limits. I consume tons of content online, including much rich media content. My kids consume tons of video content (most of it inappropriate, I’m sure), but that’s mostly done using wifi. So this isn’t something that’s on my radar screen at all—as an individual. But as a marketer, I can see where this totally makes sense. For many brands, having a captive audience is worth the cost of providing the free service.

Toll-Free Data and the Cost of Doing Business

Initially, Verizon is said to be working with just a few partners in the testing phase of this rollout, but plans to add additional content partners in 2016. AT&T isn’t moving very quickly on this and I think that, overall, figuring out how to bill correctly is part of the challenge.

There is talk about how this is a threat to net neutrality, as you’re essentially looking at a use case where big brands can afford to offer up a “toll-free Internet service” for their customers, while smaller companies will not be able to do that. It was kind of the same situation when toll-free 800 numbers rolled out. Not everyone could afford a 1-800 number, but eventually it became perceived across the board as the cost of doing business. Over time, that cost got cheaper and cheaper, as solutions were developed that served customers with needs at all levels. Will this be the same thing? It’ll definitely be interesting watching it play out.

As I mentioned earlier, I don’t pay a ton of attention to how much data I’m consuming and I’m not running up against, or over, monthly data limits. Is this an issue for you? Do you consume a lot of rich media content on the line (bonus points if you get the joke there) and is this something you ever think about?

If you’re a marketer, think about your plans for the coming year. Do any of them involve the creation of apps that you want customers to access/use on a regular basis and/or involve large amounts of streaming media? Is this something you see as beneficial? If you’re a small business marketer, do you see this as a threat to small businesses who might not be able to pay for something like this? Is this a net neutrality issue? What do you think?

Additional Resources on this Topic:

Verizon Set To Test ‘Toll-Free’ Data: What’s In It For Consumers
Half of Global Mobile Carriers Now Have Some Kind of Toll-free Data Plan
Content Engagement Remains a Challenge for Brands [Report]

This article was originally published on The Marketing Scope.

Photo Credit: rulke via Compfight cc

Shelly Kramer is a Principal Analyst and Founding Partner at Futurum Research. A serial entrepreneur with a technology centric focus, she has worked alongside some of the world’s largest brands to embrace disruption and spur innovation, understand and address the realities of the connected customer, and help navigate the process of digital transformation. She brings 20 years' experience as a brand strategist to her work at Futurum, and has deep experience helping global companies with marketing challenges, GTM strategies, messaging development, and driving strategy and digital transformation for B2B brands across multiple verticals. Shelly's coverage areas include Collaboration/CX/SaaS, platforms, ESG, and Cybersecurity, as well as topics and trends related to the Future of Work, the transformation of the workplace and how people and technology are driving that transformation. A transplanted New Yorker, she has learned to love life in the Midwest, and has firsthand experience that some of the most innovative minds and most successful companies in the world also happen to live in “flyover country.”

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