Burgeoning Demand for More Internet Inspires Variety of Ad Options that Suits the Needs of Airports, Hotels and Coffee Shops Alike

The launch of the iPhone in June 2007 fundamentally changed the landscape for Wi-Fi network operators and advertisers, alike.  Not only did it introduce an entirely new category of networked devices, but it also opened the floodgates to volumes of users previously unimagined.

With more than 50% of cellphone users carrying smartphones, the number of potential Wi-Fi users grew exponentially. And with the parallel growth of rich media consumption – think Spotify, Pandora, YouTube, Hulu, NetFlix, etc. – the burden on the network itself exploded.

All of which is a long way to say that the number of users and the amount of data they consume grew very large, very quickly. This creates a cost dilemma for the network operator. In order to ensure that the network capacity and performance can keep pace with demand, the owner has to continue to invest in it.

To avoid the tragedy of the commons – where the network is so popular that its success is also its demise – the owner has to upgrade the hardware and increase bandwidth regularly. The more people that use the network, the more frequently these upgrades have to occur.

For free network operators, this presents a formidable challenge, since they’re not charging for access, which by design delivers increased revenue with increased use that can fund the upgrades.

Some network operators have tried to fill this gap purely with display advertising, which ultimately comes up short. Traditional CPM (cost per thousand) display ads – where the advertiser pays a set fee for every 1,000 users who see the ad – only deliver pennies per user, which doesn’t offset costs in a substantial way.

Fortunately, the emergence of a new model – CPE, or cost per engagement – is more successful at delivering dimes per user (or more). A CPE approach provides an immersive experience to a captive audience, increasing the effectiveness of the advertising and generating meaningful revenue to offset network costs.

One of the most widely used CPE approaches is the video intercept, where a Wi-Fi network user has to watch a video from the advertiser before being granted Internet access.  This gives the advertiser anywhere from 15 seconds to 45 seconds of branded engagement with the device owner, in a controlled environment that provides the advertiser with 100% share of voice.

This has been used successfully in places like airports, where leaders like Denver International, Houston George Bush Intercontinental, and Detroit Metropolitan Wayne County leverage Boingo’s CPE campaigns to provide basic free Wi-Fi sessions to users while generating incremental revenue for the airport that grows with usage.

Research has shown that the majority of public Wi-Fi users find the video intercept approach to gaining access to free Wi-Fi acceptable, since the barrier to entry is so low (watch a short video) and the value gained (free Internet access) is so high.

Another free-to-user Wi-Fi network that has chosen Boingo to help generate revenue is Starbucks, which recently named Boingo the exclusive advertising and sponsorship provider for the in-store Wi-Fi and Starbucks Digital Network for their company-owned, Wi-Fi enabled stores in the United States and Canada.

Starbucks SDN_Mobile copy

While the video intercept works incredibly well as a value-added gateway in venues as varied as coffee shops and airports, Boingo has developed new CPE modules that allow an advertiser to choose a sponsorship approach that helps them best meet their marketing goals.

  • Type-In modules: These provide the user with an open box to type in the sponsor’s slogan or tagline, which dramatically increases the customer’s recall of that slogan.
  • Poll modules: These allow sponsors to generate primary data in exchange for underwriting the access costs. Because of the size of the networks, short surveys that users can complete quickly generate large volumes of responses in short order.
  • App Delivery modules: These provide users with the option to download the sponsor’s app in exchange for Internet access or premium content. With the proliferation of app-driven smartphones, this provides a quick, simple-to-fulfill gate for customers to derive value.

These modules provide a variety of options for sponsors, so they can find the right approach to deliver their messages, while using appropriate tactics to ensure the user experience remains optimized.

For expansive networks of hotspots – such as Boingo’s advertising network – this innovative media platform also allows sponsors to segment their buy by location, platform and daypart, while maintaining customer privacy. This kind of segmentation can make targeting hotspots in California for iPhone users during the lunch hour possible, without needing any personally identifiable information about those users.

Overall, the emergence of CPE sponsorships has created a win-win for both network owners and Internet users, providing meaningful revenue to help support proliferation of fast, reliable free Wi-Fi.  And that’s good news for travelers and coffee drinkers, alike.

About Melody Demel

Melody is Senior Manager, PR for Boingo Wireless, where she is responsible for media relations, brand building and thought leadership initiatives. Melody is a die-hard Nebraska Cornhuskers fan and retired NCAA DI college field hockey player.
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