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04/19/2007Wireless Web-Based Advertising: Q&A with Berge Ayvazian
To explore the range of opportunities and challenges associated with Web-based advertising and local-government wireless networks, private- and public-sector stakeholders will meet at the inaugural Wireless Web-Based Advertising and Services Roundtable at the W2i Digital Cities Convention in Chicago, May 22–23, 2007. Berge Ayvazian, Chief Strategy Officer, Yankee Group will lead the structured brainstorm discussion among Web-based advertising executives, location-based services managers, community-portal directors, service providers, city CIOs, and municipal wireless network project champions.
 W2i: Wireless Web-based advertising is a vast territory still in its infancy. It encompasses location-based services, display and video, lead and revenue generation, classifieds, keyword search, community content — you name it. How can we begin to think about it?
Ayvazian: I see three models emerging. The first is in a small or midsized community, creating a standalone business and attracting local advertisers to the start page or content page, which is the focus of the ad insertion. But that’s a tough haul.
W2i: Annapolis Wireless comes to mind. That’s a community Wi-Fi access portal where local tourist activity partly draws the ad dollars.
Ayvazian: A step beyond this is the hybrid model, where you have existing advertising media in the community that the Web-based advertising becomes an extension of, and you increase the value of that. In other words, you leverage a market phenomenon that's already there. An example here in the Boston area is Gatehouse Media's Townonline.com, which is a network of community portals that comes out of the community newspaper business, and they struggle to attract sufficient advertising online to run that. Another hybrid might go up against a visitor portal or a city portal that's already up and running. For example, Longisland.com is already up and running and is ad based and is a traditional geographic portal. To extend the value of that by Wi-Fi access is a no-brainer.
W2i: Some models have a much broader scope, with national ambitions.
Ayvazian: These are the aggregator models, in which you have several different online advertising vehicles, some of which are not tied to that community, and you have the ability to insert into that.
If you think of the models along a spectrum, toward the community model end it's not necessarily financially viable, but at the national level, the municipality becomes a natural organizing area for the aggregator.
W2i: How do major players like Google, Microsoft and Yahoo fit in here?
Ayvazian: Both Yahoo and Google are looking at this to test search-based ubiquitous Internet models in which they drive high levels of utilization and use search as an entry point into the Internet. Search has proven to be the most efficient method of capturing the Internet audience, with a user’s first click into the Internet, and then following them anywhere they go, with the ability to influence their destinations and their Web behavior as well as track and offer them advertising along the way. It’s the whole journey, because it follows you all the way to the end and always offers you bread crumbs to come back. Google would like ubiquitous Internet to be search based because they have a lot of other value-add services that would augment their ad model, including media portals like YouTube, community portals, and the many tools they would offer you as part of their relationship with them.
W2i: How do you compare or contrast location-based versus search-based advertising in these models?
Ayvazian: I don’t use the phrase location-based. I say location aware, because not everything you do is tied to your location. You don’t want to be forced back to your location as the driver of your Internet experience. Search-based is a very simple, intuitive and — let’s face it — very insidious type of tool, in that it is very easy and intuitive and it draws you in. What users tend not to know is that somebody is reaching into their back pocket and influencing their Web behavior, tracking it, and looking at their information to run a complicated business called Google. It’s great for the user as long as you’re willing to tolerate this. The whole mobile advertising model relies on your willingness to accept that versus paying for Internet access.
W2i: Why is a city an attractive organizing unit for these models?
Ayvazian: A metro area is more attractive than a city, but a city is a good start. Like any medium, you want to capture as large a geographically defined audience as possible, and tie that to local advertisers who are going to try to influence your purchasing behavior.
W2i: Say you go to Los Angeles and type “dry cleaners” into a portal or login page. A list of advertisers is going to appear.
Ayvazian: More like, you go to Los Angeles and you’re wearing a dirty shirt and then when you log on you get coupons for dry cleaners. [Laughs.]
W2i: The Web-based advertising discussion often gets tied up with the discussion of free Wi-Fi, or free Internet access.
Ayvazian: The reason they’re connected is that in order to drive high usage and adoption, you want to lower the pricing threshold and, to offset the loss of subscription fees, you have a user who may be willing to tolerate advertising. That’s the formula. Unfortunately, that has come to take the place of a well-thought-out digital-inclusion program. And the answer to this is that free is not free, somebody’s paying, either with their eyeballs or their wallet.
W2i: Has it been irresponsible to suggest that local-government broadband-wireless networks could be funded with ad-based models?
Ayvazian: I wouldn’t use that word at all. The question is whether digital inclusion is satisfied by offering free Wi-Fi. Is it a proper to do that, and worse yet, to create a mythology that there’s an even bigger tradeoff between municipal applications, all of the benefits of community Wi-Fi, versus advertising, and assume that advertising is going to be paying for any of that.
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