AOL tries to entice users with free wireless data
Verizon-owned AOL showcased a new "ad creative framework" called BrandBuilder at last week's Consumer Electronics Showcase. One of the two "experiences" provided by the technology rewards users' lead engagement behaviour with wireless plan data. Advertisers will be able to target Verizon Wireless US subscribers who will be given additional data if they participate in activities such as supplying their email address or downloading a coupon. AOL calls the system a "mobile-based value-exchange". However, the Federal Communications Commission has previously expressed concern that such mechanisms could be an abuse of wireless networks' market dominance.

In 2015, Verizon purchased AOL for $4.4 billion. Now, the mega wireless carrier is leveraging its wireless network as part of a new ad offering called BrandBuilder by AOL.

Dubbed a new “ad creative framework, “AOL launched BrandBuilder last week at the Consumer Electronics Show (CES) conference. One of the two ad “experiences” that BrandBuilder enables is called DataPerks, which rewards users’ lead engagement behavior with wireless plan data.

Beginning in the first quarter, advertisers will be able to target Verizon Wireless subscribers in the U.S. and reward them with additional wireless plan data when they take a beneficial action defined by the advertiser. For example, an advertiser could use DataPerks to incentivize users to supply their email address, complete a survey or download a coupon.

The rise of Verizon as an ad player

AOL describes DataPerks as a “mobile-based value-exchange” that is designed “to incentivize consumers and address concerns over wireless data consumption,” and the new ad offering is just one way that Verizon, which is in the process of acquiring Yahoo, is demonstrating its desire to become a bigger player in the online advertising space.

While incentive-based digital advertising is not new – it was, for instance, a prominent part of the early social gaming space – Verizon’s ability to trade valuable wireless data rewards for engagement is something major ad players like Google and Facebook can’t do.

But will Verizon be allowed to tap its wireless network in this fashion for long?

DataPerks isn’t Verizon’s first incentive-based ad offering that uses wireless data rewards. Through AOL and publisher Hearst, it previously launched a similar program called FreeBee Perks. AT&T, which is the second largest wireless carrier in the U.S. after Verizon, has also experimented with ads that offer users data rewards in exchange for engagement.

As MediaPost’s Joe Mandese notes, the Federal Communications Commission (FCC) has expressed concern that such offerings could represent an abuse of their market dominance.

But even if the FCC doesn’t stop Verizon and AT&T from using the promise of data credits to build new ad offerings, advertisers will ultimately have to determine whether the engagement they deliver is truly productive.

While incentive-based ads can work, they’re not a panacea for engagement. Unless properly structured and targeted, they don’t always produce quality results, and the more valuable the rewards, the greater the incentive for users to feign interest through engagement that lacks real intent.