The ad-supported WiFi model revisited

The wireless industry wants so badly to make advertising-supported services work. Advertising means big dollars for operators as they can glean revenues beyond what customers are willing to pay. That's why the idea isn't dying in the WiFi world. In fact, it's growing. JiWire, for instance, allows iPhone users to connect for free at its Ads for Access locations, FreeFi Networks recently rolled out ad-supported WiFi at the Denver International Airport and CBS rolled out WiFi in mid-Manhattan with a homepage supported by advertising.

Wi-Fi Planet has an interesting article on the subject. It talks about the fact that WiFi is so cheap, that it's difficult to entice users to rely on advertising for free WiFi access. Consumers are finicky beings, and thus there is going to be much experimenting. All I know is that we go to great lengths to avoid advertising, which is why DVRs in the TV world are quite appealing and pop-up ad-blocking software for computers is in high demand.

I always think back to NetZero in the 1990s offering free Internet access in exchange for viewing advertising. When the Internet market went bust in 2001, after the crash of Internet advertising, NetZero began charging for access time over 40 hours per month. The move invigorated the company's balance sheet.

The bottom line seems to be that advertising-supported WiFi services are just a component of business models. MetroFi says the only viable business model in the muni-WiFi market is a mixed-use arrangement that calls for municipalities to become anchor tenants alongside ad-supported arrangements. JiWire is counting on volume to make a go of its Ads for Access offering viable. The company says it reaches about 8 million WiFi users per month on networks such as Boingo and Wayport. That way it can attract some of the best-known brands in the world.

The dream of a totally ad-supported WiFi network will probably never come to fruition, but if players can figure out how to make advertising compelling to end users, it will create a nice side revenue stream.--Lynnette