As internet advertising spending continues to grow -- according to the IAB and PxC, projected U.S. online advertising spending is currently expected to hit $36.5 billion by 2011 -- advertisers are eager to find new ways to target their audiences and bring a more personalized experience to internet users. As such, traditional banner ads are being replaced with more engaging and interactive platforms that now include targeted content and even video.
Amidst all the projections of ad industry growth and expanding ad formats, an industry of companies is developing that seeks to unclutter the advertising space by targeting audiences in places they find themselves often -- hotels, restaurants, airports, coffee shops and the like. As consumers become increasingly mobile, better educated and more protective of their privacy than ever before, advertisers must innovate in their methods to bring unobtrusive and relevant messages in unique and effective ways.
Drivers of change
While companies like Microsoft are bringing advertising directly to mobile devices, others have found a way to bring advertisers access to a captive audience of out-of-home users through a new form of Hotspot advertising that effectively geo-targets consumers with 100 percent precision, wherever they may be. Such Hotspot ad networks work by injecting a thin messaging frame at the top of a user's browser, in turn offering consumers free or subsidized internet access and the third party venue with a share of the ad revenue. Additionally, advertisers get access to out-of-home broadband users for an average period of 60 minutes -- much more exposure than other, traditional forms of out-of-home advertising.
So what can consumers expect to see when logging into this form of ad-sponsored internet session at hotels, malls, coffee shops, restaurants, airports and other consumer venues across the country? Users are served with an ongoing "digital billboard" that is displayed at the top of their browser, running relevant advertising from companies such as Toyota, McDonald's, MLB, recent movies or concerts, and others.
Why, you might ask, is this offering appealing to both advertisers and consumers? Besides bringing relevant advertising to internet users that is targeted to their location and interests, a key thing to note is that Hotspot advertising does not interfere with a user's session, nor does it blast him/her with annoying pop ups that have nothing to do with their interests.
Hotspot advertising vs. traditional models
As a point of comparison, Hotspot advertising (over the course of a 60-minute internet session) equates to the same exposure as walking by a mall panel ad 720 times, reading the same print ad 180 times in a row or watching a TV commercial 120 times in an hour. The bottom line is that Hotspot advertising is a huge, yet for the most part, untapped opportunity for advertisers to speak directly to their customers in a format that is much more persistent and consistent than today's more traditional mediums.
The growing market for persistent hotspot advertising
As proof of consumer sentiment, in a survey my company conducted in September of more than 100 individuals at national coffee shop chains, hotels and book store chains throughout the Bay Area, 91 percent of respondents noted that they were aware of at least four free Hotspot venues near where they work and live. More than 90 percent responded they would view advertising in exchange for free Wi-Fi access. And, the majority of users picked the venue based on the offering of free access.
Further, it's worth noting that the majority of respondents were not willing to be presented with any advertising that overlaid or otherwise interrupted their experience, making this new form of online advertising an even more appealing alternative worth adopting.
This is exactly the sort of consumer feedback that is driving advertising innovation. Customers are willing to accept a branded advertising experience in exchange for more freedom and increased internet access points. Hotspot advertising is uniquely suited for an endless variety of industries -- from hotels looking to offer users free internet access while serving relevant ads that relate to their specific location, to malls and airports seeking to enhance the everyday individual's experience, to locally-based businesses simply looking to reach new users. The selling point for advertisers is that this new form of advertising is an invaluable and much more permeating way to reach the right audience at the right place and at the right time.
Mark Smith is executive vice president, strategy & products, AnchorFree. Read full bio.
