Operators need to work harder to promote the benefits of sponsored data, according to a new report.

Strategy Analytics said collaboration between players, which include Portugal Telecom and Telefónica in Europe, and better brand awareness were needed to drive the market forward.

Sponsored data is part of the wider mobile advertising market, which the analyst firm said had reached $80 billion in size last year.

Altice-owned Portugal Telecom announced a partnership with Postr in November, whereby customers are able to access free data and special offers in exchange for engaging with in-app and lock-screen advertising.

Telefónica signed similar deals with Aquto and Datami during 2017, but is targeting Latin America.

The Spain-based operator’s Director of Advertising told European Communications that he was “cautious” about bringing the service to Europe.

Strategy Analytics said fragmentation of operator offerings has limited early stage growth, while increased size of data bundles in mobile service and widespread availability of Wi-Fi in some countries has raised doubts among operators as to the perceived value of the sponsored data model.

Nitesh Patel, Director, Wireless Media Strategies, Strategy Analytics said: “Raising awareness and providing proof points of the results that can be achieved by brands with sponsored data campaigns in each market and for specific use cases remains important—we encourage CSPs to work together and with associations to increase awareness of the benefits of sponsored data and data rewards.”

Susan Welsh de Grimaldo, Director, Service Provider Strategies, Strategy Analytics added: “Challenges still remain for CSPs in terms of improving their strategy and approach to sponsored data and evolving that approach in an iterative and agile way to best target end user segments and brands and others that will foot the bill in their markets.

“However, sponsored data provides an opportunity for CSPs to evolve their business to create new revenue streams and grow in sectors like mobile advertising, while also boosting customer loyalty.”

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