As mobile device users add ad-blockers and other tools to avoid advertisements, companies are fighting back by paying for the data individuals use when they watch ads or videos.
Boston-based Aquto said Wednesday it has raised $8 million in Series B funding to provide more users with access to sponsored data. Aquto, founded in 2012 by Susie Kim Riley, works with 60 to 70 marketers and companies worldwide to offer mobile users ads that don’t use data, or give users the opportunity to accumulate data minutes by downloading apps and consuming content.
Aquto connects companies and marketers such as Fandango, Hershey’s, and Disney, with mobile operators in the United States, Europe, and Asia. In the United States, Aquto works with AT&T’s postpaid customers. (AT&T also has sponsored data partnerships with five other companies, including Boston-based DataMi.) Verizon and Aquto collaborate for Verizon’s pre-paid customers.
Riley said mobile users are at least 50 percent more likely to watch an advertisement when they know it won’t consume their data.
“In the US, most people have data plans, but people do get annoyed when they see ads consuming data. That’s one of the main pain points,” Riley said.
A recent New York Times article, which Riley highlighted, found that more than half of all data usage on mobile news websites comes from ads.
Aquto offers two approaches to sponsored data. In the “Zero Rating” program, users can engage with online content free of data charges. This means watching a 30-second advertisement will not waste 5 to 10 megabytes of data, Riley said.
Aquto also offers marketers the ability to give users data when they download the app or reach a certain level within the interface, called “Data Rewards.” The accumulated data is added directly to the user’s wireless account, dependent upon the person’s mobile carrier supporting sponsored data.
For example, 20 megabytes of data can be earned for each Hershey’s recipe viewed, according to Aquto. While 20 megabytes is small in comparison to 1.8 gigabytes, the average amount of cellular data used by Americans from July to September 2014, every little bit helps. Riley said about 80 to 85 percent of Americans do not have unlimited data.
A survey conducted by Aquto of 1,000 AT&T and Verizon customers reveals that 64 percent of respondents are concerned about going over their data limit; 49 percent of people surveyed say they would view ads to earn additional data. This information was gathered about a year ago, Riley said, but “we think that sensitivity is still at those rates, if not higher.”
Aquto’s total funding now tops $16 million and includes investments from Iris Capital, STC Ventures, Matrix Partners, and Northbridge Venture Partners.
Editors note: A previous version of this article did not include Susie Kim Riley’s full name.