Manoj K Abraham at Mindtree Ltd asks whether consumers could be paid for the fact that advertisers are taking advantage of their attention
Imagine your smartphone pays itself part of your monthly phone bills or your smart TV gets a discount for your cable subscription? The digital advertising media is seeing enormous growth thanks to the recent advancement in connectivity and gadget technologies. Indeed, smartphones are becoming increasingly common. Items of consumer equipment like TVs, refrigerators and microwares are getting more and more connectivity features. In all such cases, there is a big opportunity for digital advertising media to gain access to the display area of these devices.
If there was a controlled mechanism for allowing the provider or advertising company to use a consumer's personal display area this would create a hugely significant change in the digital advertising industry. In essence it would mean that the consumer sells or rents out his/her gadget display area, an advertising company pays the cost required by the carrier for data traffic and the ad company makes its revenue by displaying ad contents in a consumer's display area.
During idle time, the system can process an advertisement feeding from the ad company and update the specified device’s display area. This could be on a mobile phone or on the portion of a smart TV screen and data traffic can be streamed through a connected wi-fi network or through a data network. Indeed, users could then set preferences for a time and display area based on settings and the advertising company can target benefits for the consumer.
Over US$600 billion is being spent annually on advertising across the world. This money goes to media owners, professionals working in the industry, celebrities and other stakeholders involved. None of the money is going to the actual targets of this business - the audience. It is certainly a debatable subject whether the audience needs to be paid for what they are viewing or listening, but if someone is taking advantage of your attention, why not get paid for it?
Looking at the concept in more detail, there are three main components in this model. The ad provider, the digital ad agent and the end equipment owner. The digital ad agent provides a platform for the end equipment owners to rent their digital real estate and end users can register with the ad agent in order to get ads to his/her rented display area. Ad agents will then provide the customer database to the ad providers and the ad providers can choose different end-users based on their business interests. The ad providers also register with the ad agent and, once the end-users are selected by the ad provider, the ad agent will start feeding the media content through to the end gadgets. The ad agent will monitor the usage and the revenue calculations.
A basic implementation model is made up of two major elements – an ad client and an ad agent server. The ad server is the centralised element which manages ad providers, end users, content feeds, account handling and revenue calculations etc. The ad agent client will be present in the end user equipment and will be responsible for displaying the ad contents in the rented digital real estate. The ad agent client also manages the user profile settings.
With regards to revenue calculation for end-users, this simple case study explains the revenue estimation of this model. Suppose an end-user is having a smartphone with 3G/4G data connectivity, then an estimated data cost of £15 a month is considered. Two configurations are explained – ads using static images and ads using video content. Below table gives an over view for the revenue generation per month.
Here, the revenue is estimated based on the cost for data traffic and the figure is given assuming 100 per cent profits.
Based on the above table, the ad provider will have to spend £0.01p per customer for a static image configuration and £0.03p per customer for a video content. In order to reach 100,000 customers per month, the ad provider will have to spend £1,000 for static images and £3,000 for video contents. The ad agent provides services to both ad provider and to the end user and both entities need to pay a service charge to the ad agent; therefore these charges will be the source of revenue for the ad agent. Please note, these figures are just for explanatory purpose and with data traffic rates are coming down drastically operating costs can be expected to be much lower. Ads can be chosen in such a way that they go to the right audience and this depends on the demographic profile of the end users.
In conclusion, the concepts presented in this article can change the way of today’s digital advertising industry. They can be extended to any personal digital gadgets based on their communication and presentation capabilities and the business feasibility is looking promising although it does need further clarification regarding different cost/revenue aspects.