Tesco Mobile Is Banking You’ll Look At Ads On Your Lock Screen For A Discount On Your Bill

TescoMobileThe current state of the advertising value exchange often leaves a little something to be desired, which sometimes leads to ad blocking and sometimes leads to total disengagement with advertising.

“Most people block ads because they don’t feel like they’re getting value out of them,” said Matt Berriman, CEO and co-founder of Unlockd, an Australian startup that partners with telcos to reward users for allowing ads and sponsored content to appear on their (Android-only for the moment) phone’s lock screen.

They can either tap to engage with the content or dismiss it and go about their business.

In return, users see geotargeted deals, earn credits and receive not insignificant discounts on their monthly phone bill. In the case of Tesco Mobile in the UK – Unlockd and Tesco announced their partnership on Thursday – subscribers can save 3 pounds (about $4.30) a month.

If every one of Tesco Mobile’s 4.6 million subscribers signed up, that would be $13.8 million out of Tesco Mobile’s pocket every month.

But that’s all part of the plan, according to Tesco Mobile CEO Anthony Vollmer.

“The proposition is about driving value for our customers, not revenue for ourselves,” Vollmer said. “This is about growing our customer base through innovation and differentiation in a crowded market. It’s particularly appealing because it gives consumers freedom of choice.”

True freedom of choice also includes the choice to block ads, and some people will always go that route. But even if users choose to block ads on the mobile web with an ad-blocking app, they can still participate in Tesco’s program.

“This is not the network taking a stance against ad blocking but it is about offering choice to our customers,” Vollmer stated emphatically. “Now they have the option to get value from viewing ads.”

Unlockd, which raised an $11.6 million Series A in April, maintains direct advertiser relationships, including Doritos, McDonald’s, British Airways and British food brand Branston, which are all signed on to provide discounts and offers when users unlock their phones. Partnerships with Facebook Audience Network and Twitter’s MoPub allow Unlockd to serve up targeted advertising based on preferences.

But it’s not just ads, it’s content. Through a partnership with News UK, which owns The Sun newspaper, users will also see breaking news alerts and paid content on the lock screen. Think “English Premier League Football brought to you by This Fast Food Brand” or “The Travel & Entertainment section sponsored by That Airline.”

“It’s a way to distribute content right to the consumer’s eyeballs without having to fight multiple publishers for their attention,” Berriman said.

One criticism leveled at Unlockd when the company first launched in October was that the offering is a little gimmicky; that users would either find lock screen ads annoying or just ignore them altogether.

Although Berriman declined to say how many users are participating, he did note that clients, including Sprint subsidiary Boost Mobile in the US and Lebara in Australia, have seen a roughly 4% tap-through rate.

“People aren’t just dismissing, they’re actually engaging,” Berriman said.

And that’s because they’re getting a tangible benefit out of it.”

“Imagine if someone gave you some cash or vouchers every time you watched a TV advert,” Vollmer said.

It’s a very different approach than the one being taken by Shine, whose technology allows telcos to block ads at the network level. Shine’s public clients include Caribbean carrier Digicel (13.6 million subscribers) and UK Three Group, which is planning to run a 24-hour test of the tech in mid-June across Three Italy (4.3 million subscribers) and Three UK (10 million-plus subscribers).

For the purposes of its test, the Three Group is reaching out to customers to opt into the experience. But in the Digicel case, the carrier is simply blocking ads across its network automatically for all users.

It’s a blunt answer to a nuanced question, Berriman said.

“There’s a lot of talk about ad blocking and I do think what Shine’s doing is interesting, but that seems to be an extreme measure to solve this problem,” he said. “We’re trying to make this into a win/win for all the parties involved, including advertisers and consumers.”

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