Out-of-home advertising has traditionally been billboards and transit displays but today there are hotspots in thousands of locations from hotels to airports, where consumers with laptops and wireless devices can receive out-of-home advertising messages. The first examples were flashing images and banner ads, but AnchorFree’s new broadband media platform adds video to the touch points that display advertising messages. Mark Smith, AnchorFree’s executive VP of strategy and products, discusses AnchorFree’s offering and how it advances hotspot advertising with the addition of video.
iSPOT: Can you provide some background about the AnchorFree offering?
Smith: We’re launching a hotspot media network. We work with hotel chains, airports, coffee shops, restaurants and others and offer them the ability to earn incremental advertising revenue from broadband access. We redirect the web traffic from those locations and insert a persistent messaging frame that is at the top of the web browser. The existing content gets pushed down and there’s an advertising frame that sits on the top. We sell ads in there. The benefit to the venue is they earn incremental revenue for making space available, we share it with them. The consumer gets subsidized access for broadband. We’ve lined up nearly 10,000 locations around the country under exclusive two to three year advertising contracts. Under 10 percent is live today, we’ll deploy the rest over the next two quarters. Most of our business is conducted through operators who manage the broadband access to those locations. We have operators who manage Marriott hotels on the East Coast and another on the West Coast, it’s very fragmented. It’s like a version of T-Mobile, although we don’t install, operate or maintain the actual broadband connection. We offer a vehicle for locations to create an ad frame in the browser that creates new digital messaging real estate. Our positioning is the intersection of out-of-home advertising and interactive. We have the ability to target content and advertising to the address of the locations as well as to target contextually based on what’s on the page.
iSPOT: How can advertisers target their messages?
Smith: A scenario could be we offer BMW to be in auto dealerships and Jiffy Lube locations in certain zip codes, that’s the geotargeted solution. Another advertiser might want to be in all major resorts in Atlantic City. You can target by those venues, which offer a certain number of minutes to their users. We know based on existing data that users are online just over 60 minutes per session. It’s compelling for an advertiser, it’s not like they’re walking by a billboard–you have a 60 minute average in that ad frame and it can be more than ads, it can be information and content. We have an open network model where we independently sign up locations and share the ad revenue. We also have a closed network solution where we go directly to the brand and offer them the ability to earn incremental ad revenue and run their own content so they can have a branded relationship with their customers at their own point of consumption. For instance, a book store can include content about new books that are available and author appearances in the store. We can bring in their existing creative and online assets and run non-competitive advertising. It allows the user to sell advertising and have a branded relation with consumers like they never had before.
iSPOT: Can we take a step back and talk about the hotspot advertising market. How has it developed and how do you take it to the next level?
Smith: When you go to a Starbucks or any hotel, when you first get online, there’s a landing page. Usually that doorway page is the only piece of real estate for advertising, but it’s just redirecting a landing url. We’re taking it to the network level. We’re not just interested in the landing page but in every page after that; no matter where you go, you’ll have a persistent message. It’s a 728 x 90 unit that’s not very invasive and we give users the ability to close that frame if it annoys them. We run ads for large brands ads, not the blinky flashy ads. We’ve created new digital messaging real estate in hotspot venues that never existed before. From a network perspective, there are advertisers, publishers and an audience. We’re an ad network but our customers aren’t publishers, but the operators who own the bandwidth. We’re selling access to the hotels and restaurants and their demographics and zip codes. We’re network operator agnostic because we don’t do the actual broadband access. We’ll roll up the network in a common platform for advertisers to reach an audience.
iSPOT: Hotspot ad formats have been limited to Flash ads and banners. Can you offer video ads?
Smith: Yes, we’re running videos from SpotXchange and others at the landing page. We work with a variety of rich media formats. We’re also running interstitial videos during the user experience after every so many minutes of access.
iSPOT: Will consumers accept video ads with hotspot content?
Smith: We did a study and went out to San Francisco and interviewed over 100 people at various hotspots. We were trying to discern what they were sensitive to. If they felt their choice was free access versus paid access, almost everyone was welcome to an initial video ad. Around 70 percent of viewers were willing to view a :15 video ad before they gained access. But if it was a :30 or if we put the video up after 15 minutes of their session, it very quickly dropped off. After the first video, they were unwilling to have their experience interrupted with a video ad that pops up. It has to do with how it affects their experience. As new formats come out with video that resides in a banner that rolls over real estate, it’s acceptable. But they’re only willing to see it at the beginning of a session and they don’t want the session interrupted.
iSPOT: Who are some of your advertisers?
Smith: American Express, AirTran, Circuit City, Clorox, Ford, Harrah’s, Kaiser Permanente, Major League Baseball, McDonalds, Princess Cruises, Prudential, Qwest and Toyota.
iSPOT: What kind of ad packages are available?
Smith: We’re selling on a CPM basis, we haven’t gotten into CPA or CPC. We sell sponsorships as the premium package. Advertisers sponsor locations by venue category, like coffee shops in certain regions. For each hotspot we run three sponsorships against a given location. Sponsorships will run particular to a user’s session. Once it’s through, we’ll roll another one in. We also offer a spot buy where they look at the footprint and pick various locations they want to run ads in, but they’re not exclusive. We also do a run of network feed.
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