Tech Transformers

Would you watch ads in exchange for free data?

Would you be happy to view ads in exchange for free data? Well that's the business proposition from start-up Sliide which is set to launch next month in Nigeria.

The British firm has created an app that turns your smartphone's lock screen into a place with curated content, as well as advertising.

With more people coming online in Africa, Sliide decided that Nigeria would be its first market given the emerging number of consumers able to afford smartphones.

"Emerging markets are going through the roof in terms of ad revenue. The typical ads per click in Nigeria was one cent. It's now between five and seven cents," Frankie Kearney, co-founder of Sliide, told CNBC in an interview at Mobile World Congress (MWC) in Barcelona on Wednesday.


"In terms of the value, advertisers are seeing the emerging middle class is huge."

The proposition is likely to stick in the emerging markets where data plans are still quite expensive, but smartphone penetration is on the rise. Sliide's model could be hard to transfer over to markets such as the U.S. and U.K. where data plans are often sold as part of a contract.

Sliide is the latest start-up to try to tackle the mobile advertising space, an area that the industry has still not completely figured out. This has stoked the rise of ad blocking, a major concern for marketers and players such as Google and Yahoo.

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Start-ups are taking different approaches to make mobile adverts work for both consumers and marketers. For example, an app called Slidejoy pays customers to view the adverts every time they look at their phone's lock screen.

But Sliide's approach is different, offering data instead of money to users. The British start-up has an interesting business model. It gains revenues from advertising and then uses some of that money to buy data off of operators at a discounted rate. It then gives that data to users.

For the operators, the long-term strategy is getting more people online and therefore using their mobile internet services.

"What they want to do is get people to start using data, understanding the value of asking a question on Google or being able to check if a product is cheaper, " Kearney told CNBC.

Experts suggest the rise of these reward-based advertising models has been stoked by the failure of marketers to figure out mobile advertising. Another company similar to Sliide called TextMe, offers people free data, calls and text messages for viewing ads.

It has several million monthly active users and said the industry is beginning to trend towards the reward-based models where there is a value exchange between consumers and brands.

"I think there was a phase of denial about mobile advertising. That's gone now," Julien Decot, chief revenue officer at TextMe, told CNBC on Wednesday.

"Then there was the phase of thinking they could use web ads and put that on a mobile and that didn't work. We're now also seeing models, mobile specific, like the reward model," he added.