Hilton Issues 4G Data Cap Warning

The 4G data caps levied by mobile operators could hold back some of the more creative and engaging types of mobile marketing and advertising.

So cautions James Hilton, CEO of M&C Saatchi Mobile. Hilton notes that in 2012, in the days before 4G went live in the UK, mobile ad revenues in the country hit £181m for the first half of 2012, with display banners and text ads contributing £41m, of which 20 per cent was rich media according to the Internet Advertising Bureau. And with the 4G auctions taking place, there is once again focus on the hype surrounding the opportunities with next generation mobile internet.

“We’ve been here before,” says Hilton, “with the networks promising a brave new world of fast, ‘always-on’ mobile connectivity when they went live with 3G in 2006. Anyone still struggling to open a simple web page with a 3G connection will know how hollow those claims were.

“This time, however, there’s more substance to the hype. LTE, the technology behind 4G, is up to five times faster than 3G and is already in 18 UK towns and cities. And thanks to auctions taking place right now, by May, Vodafone, O2 and 3 will be able to launch their “own 4G services too. With 4G, rich-media share will grow thanks to the jump in speed, delivering content seamlessly allowing consumers to start engaging with new forms of mobile advertising.

“There is a caveat to this though. For owners on a limited data tariff, ads that eat up their data package will be seen as a nuisance. The iPhone 5 has already been shown by Arieso to use up to 50 per cent more data than the iPhone 4S – due in part to the internet speed it is capable of achieving.

“If this can be overcome, then in the long term, 4G may usher profound changes, offering the same kind of performance over cellular connections that consumers currently associate with wi-fi connectivity. As one example, there could be opportunities for retailers to offer high-bandwidth mobile downloads in store to complement their physical offerings. My fear is that it’s a big if.”