What's the catch? Company offering free phone, plans in exchange for user data
KITCHENER – It seems too good to be true: a free phone with free data.
But that's exactly what a Guelph company is offering, with a catch.
Airo.Life is very upfront about that catch. Along with the phone, consumers will be subject to targeted advertising, and the company will track and sell your data.
"We have a banking partner who pays for the phone and an ad agency who pays for the data," explains founder Douglas Mochrie.
In return, the bank has access to new customers and the ad agency gets your attention and data.
Mochrie says that you'll be streamed a thin line of content that's tailored towards your interest and the occasional advertisement.
The controversial part: the company may sell your data later on, but they say that all of your info will be stored anonymously and only shared with your consent.
"Your information is valuable and they had been selling that without your consent in the past and it was buried," Mochrie explains.
"We're not going to operate like that."
Marketing experts say this style of free business model can be successful.
It shows how desperately companies want user data.
"It's not necessarily a bad deal, you get free TV, in return you have the opportunity to watch an ad, you get free mobile, in return you get the opportunity to watch an ad. So it's better than paying exorbitant subscription rates," says marketing professor Brad Davis.
"Facebook, Twitter, those kind of companies, they're not making money by keeping us connected. They're ad agencies, so they track who you are and insert pop-up ads."
Airo.Life says it was signing up 1,000 people per day during its test runs.
It hopes to offer more of the new free phones until next year. Its U.S. launch is scheduled for August 2020.