Thursday, October 06, 2005

Bambi Francisco: Expands on WiFi Advertising Thoughts

OK, I'll toot my own horn - I beat MarketWatch - though Bambi had a few more details. And she happens to be in San Fran where she has better access to the players. Anyway, read my post yesterday and then read this:

Google FeevaCommentary: To build or to buy, that's a question
By Bambi Francisco, MarketWatchLast Update: 12:01 AM ET Oct 6, 2005

(Editor's note: Bambi Francisco's Net Sense column will now appear twice a week, and she's just launched a weekly video product highlighting key interviews, called The Bambi Francisco Files. To fulfill her new roles, she will no longer be writing the daily Net Stocks column, which she authored for six years.)

SAN FRANCISCO (MarketWatch) -- I'm sorry, but no wire inserted into my brain will ever understand my intent or motives.

As predictable as my actions may be, even if technology is smart enough to know some of my needs before I do, it won't be able to anticipate external changes to my circumstances. So even though the running joke within the Googleplex is to create some channel into our minds, it'll never truly understand us.

Nonetheless, it'll be getting pretty close. And, when I say "close," I'm referring to geography -- a pretty significant component to knowing our needs beyond just knowing or guessing what our likes and dislikes are. This is, of course, if Google (GOOG) becomes the network operator of WiFi (or gatekeeper to the Internet) in San Francisco.

As Google has said, it plans on testing location-based technology if it gets approval. With innovative technology from startups like Feeva, one can begin to visualize and appreciate location-based advertising. (Feeva is a pun on fever, and implies a heating up of the network.)

It's a wonder Google doesn't just buy this startup. After all, Feeva is in fund-raising mode, and Google has sponsored Feeva's WiFi project in San Francisco's Union Square area. Google said it is building its own ad-targeting technology in-house.

To be sure, it's unclear whether Feeva's technology is further along or more sophisticated than whatever Google's scientists are brewing up. I suspect, however, that the very polite and doe-eyed CEO and co-founder Nitin Shah has credibility. He has 17 years experience at Bell Labs and he's the principle architect of Lucent's current CDMA and 3G product.

See my interview with Shah.

At the very least, Feeva has compiled a lot data to know just how people in San Francisco are responding to free WiFi. His goal, and I suspect Google's, is to see whether enough people will sign up for free WiFi.

He's set up these so-called "hot zones" - areas where you can fire up a laptop and get online -- in different parts of the city already, including Union Square, the San Francisco public library and the 4th and Townsend neighborhood near the Caltrain station.

Around Union Square, about 3,000 people a month, or 30 people a day, log onto the free network, said Shah. (They're mostly those sitting in the Borders book store in Union Square, I'm told.)

Obviously, there looks to be thousands of people roaming through Union Square, making a billboard -- however costly -- far more compelling of advertisement. Billboards cost about $50,000 a month, according to Shah's numbers.

But WiFi access in public areas gives marketers the opportunity to create personalized billboards.

As Shah sees it, "with $200,000, a network operator can install enough wireless gear in public spaces where 50,000 to 100,000 people" can be targeted, said Shah. Indeed, it took only two access points -- one acting as the gateway or connection to the Internet -- strategically placed around the square. (I won't say where they are, but if you watch my segment this weekend on MarketWatch Weekend, my WiFi report will show exactly where they are.) If the number of users goes up to 30,000, Shah said he'll likely need to put up additional nodes.

The hot zone around Caltrain station, which was just turned on recently, is now seeing 30 people a day logging onto the Net for free.

Based on his observations of the hot zones, Shah said Feeva's WiFi access has now reached about 10,000 users a month.

Based on the adoption, he believes marketers will spend $20 million on targeted-ads in San Francisco within six months.

In other words, he believes that an ad-based business model would recoup the cost of the initial outlay to build a WiFi network in San Francisco. Feeva was one of the companies that gave suggestions to San Francisco Mayor Gavin Newsom's office on how to build, operate and pay for a free or low-cost WiFi network.

So, how would the advertising work? When you fire up your laptop, say in Union Square, you can choose a number of networks. If you choose Google WiFi, a terms-of-usage page pops up. After you accept the terms, Google's search page pops up and you're online and free to roam.
Today the targeted-ad technology is just being tested in Feeva's labs until there are enough users, and possibly approval from San Francisco.

But if it were turned on, theoretically, Feeva can ask certain questions on its terms-of-usage page. For instance, one question may be, "What are you shopping for?" or "Would you like to know where the nearest Starbucks or coffee shop is?" After you answer those questions, Feeva can sell those who said "yes" to the Starbucks question to, say, coffee shops.

An example Shah showed me was of an L.A. resident visiting San Francisco, who also has a laptop with home-page preference going directly to Yahoo's (YHOO) MyYahoo. If he logged onto the Google WiFi network, his MyYahoo homepage would show local information for San Francisco movies, weather and so on.

Another example would be foreigners who possibly can't really understand all the billboards around them. Shah said the company is also working on ads that can target you in your own language.

Now, that's not a bad idea.

3 Comments:

Blogger FreeThinker said...

Speaking of San Francisco movies, do you have a favorite?

11:06 AM  
Blogger Christopher Miller said...

Dear "Free Thinker"

Can you explain why you commented on my blog? Yes, the phrase "San Francisco Movies" was there, but it didn't have anything to do with the entry's content. What's up? I though it was SPAM at first.

11:18 AM  
Blogger FreeThinker said...

Christopher,

I know your post was mainly about SF WiFi, and sorry to get off on a tangent, but since you mentioned SF movies, and that topic was heavy on my mind, I was curious about your favorites. That's all!

1:21 PM  

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