Hot spots with a catch: Ads
Hot spots with a catch: Ads
International Herald Tribune (New York Times syndication)
NEW YORK: People who like to use their laptops, iPhones and other devices in public are always so delighted when they stumble on a wireless hot spot in an unexpected place. But will they be pleased enough to look at ads before getting their broadband fix?
AnchorFree, a company in Sunnyvale, California, has introduced a service that lets U.S. merchants of any size - from a large bookstore chain to a mom-and-pop restaurant - offer free, advertising-supported Wi-Fi to customers on the store premises. People who are shopping or eating in an AnchorFree location will see banner ads on their screens or short video spots, or both, before their browsing session.
Among the major companies that have signed up to advertise on the AnchorFree network are American Express, Toyota, Circuit City, McDonald’s, Clorox, Ford, Kaiser Permanente and Major League Baseball.
Mark Smith, executive vice president of strategy and products for AnchorFree, said that advertisers can tailor their ads to reach people at specific locations in the network. For example, an ad for a Lexus might be shown to customers staying at a four-star hotel, but not to guests at an airport motel.
“Advertisers could target airport travelers versus vehicle travelers, for instance,” he said.
With the rise in hand-held devices that offer Web browsing, Smith said that he viewed the Wi-Fi network as an untapped market of virtual billboards. Controlling this valuable bit of real estate, he said, gives companies “the ability for them to have their own branded relationship” with people “while they are their point of consumption.”
Until recently, the two most widespread options people had for using wireless broadband at public hot spots was to pay a subscription fee to their cellphone carrier or to pay a daily or hourly rate to the retailer that hosted the site. AnchorFree is one of a handful of companies offering an alternative model, one in which the advertiser pays but the retailer and the Web-surfer do not.
Businesses that traditionally offer Wi-Fi to customers - hotels for example - can sign up with AnchorFree at no cost and collect a share of up to 50 percent of the advertising revenue. For small businesses, which might not be able to afford Wi-Fi service, AnchorFree will supply the necessary router and other technology at no cost.
Then the retailer can promote its free wireless service, which could prove to be a competitive advantage. Some hotels, for instance, charge guests $10 to $15 a night for Wi-Fi access.
Smith said that AnchorFree’s technology creates a “persistent messaging frame” by pushing down the Web page on a device’s screen and inserting a space for a banner ad. The space is independent of the Web pages being viewed and does not change based on where the user is surfing.
AnchorFree offers its several options to retailers and advertisers. With the open network option, a venue agrees to run any ad from the AnchorFree rotation, and in the closed network option a company with multiple locations - like a bookstore chain or hotel - can run its own advertising or other messages within that network.
Brad Agens, senior vice president of ad sales for Gorilla Nation, which connects online advertisers to more than 400 Web sites, said that AnchorFree was the first network it was representing. He said that companies seeking to buy ad space online were “looking beyond the portals and the large, branded destinations” like ESPN or MTV.
AnchorFree is not the only company to offer an advertising network for mobile broadband. JiWire, a young company based in San Francisco, has a similar system, though with a different technological approach. Analysts in the wireless industry say they expect that this sector will evolve and mature along with the growth of the wireless Internet use.
“The real key is whether advertisers will embrace this model and drive online advertising revenue towards Wi-Fi hot spots,” said Berge Ayvazian, chief strategy officer with Yankee Group, a technology research and consulting group.
He said it was too early to evaluate whether wireless advertising would emerge as a robust market separate from the more established realm of online advertising.
“New economic models around advertising are disruptive,” Ayvazian said. “If companies like AnchorFree can add a new layer of innovation around free broadband access, they can be disruptive again and take market share.”