WiFi Salon

The Wall Street Journal today had an interesting article on one potential business model that would support MuniWiFi: Advertising.

Here’s the link: “Wi-Fi Sponsored By…“

The article discusses how the ad supported muniwifi model has not taken hold because large advertisers cannot buy ads in bulk or across large areas because WiFi is a very local and small scale thing. Each municipality is a separate negotiation. If you are selling or promoting a national brand, that is a problem.

One potential answer, according to the article, is to aggregate the locations, get a hundred providers to sign up with your ad service, and then turn around to the major brands and sell that space. This is the JiWire strategy. They are a WiFi directory service, a provider of WiFi security solutions, and now in conjunction with Microsoft a provider of advertising network services.

The value proposition is this: You are a Wireless Service Provider (WISP). You run their ad platform on your network. They have many dozens of networks signed up. They are able thus to grab ad dollars from national advertisers because they now have the reach and scale necessary, and they split the revenue with the WISP. Free WiFi, ad supported.

Will this work? I would say that unless this otherwise top-down platform allows also for a means by which to create highly local ads, and support user generated content for reviews, recommendations, new locales, this alone will just will not work for (free) muni WiFi.

A director from Digitas noted that people would be very likely to tune when watching the obligatory ten second video that would pay for the free WiFi. Maybe so, but the medium — broadband wireless internet — is going have advertising possibilities — interactive, location-based, IP based — that this re-purposing of desktop ad technology just lacks, and which is now, as noted, real tired.

We respectfully submit that WiFi’s strength is that it is the internet, localized. Local content, services, and yes, advertisements. Advertising is relevant to the extent that it is actionable. With WiFi, the customer is the point of sale, and a WiFi Zone and a Commercial Zone can be one and the same.

Integrate local advertising with a local interactive map, geolocate the content, enable user created content. Keep it hyper local, aggregate. The Long Tail, if you will.

We believe we are a ways from where you can show the right ROI to local businesses using traditional ad placement sales: How many devices / users would you have to have on a network to create enough sales to even pay for a $135 ad for a pizzeria. The question is, where do we see the right density of devices in use at WiFi Hot Spots –2008? 2010? — to command the ad rates needed to sustain the local WiFi network? Microsoft and JiWire have their projections.   More revenue sources beyond advertising is required for now.

We believe strongly that lighting up a commercial corridor and seeding the area with wireless screens, kiosks, handhelds, and providing a local interactive map will create advertising solutions that will be all the more effective for being part of an “immersive” wireless experience. Do large brands even have a place here?