AnchorFree, an ad-supported WiFi service, says it is seeking to add additional verticals to its hotel and coffee shop strongholds. The company, which has raised $6 million, and already has 10,000 locations and 5.4 million user sessions a month, wants to serve locations “wherever people wait,” says EVP Mark Smith. “Auto dealerships, restaurants, doctors waiting rooms….”
Smith notes that the company also serves 15 airports via its partners, and 26 marinas and yacht clubs. It is also looking to enhance its retail presence, and is installing a “few new outdoor shopping malls in the Bay Area” – a segment also targeted for localized cell phone advertising – perhaps an adjacent business — by Nearby Now.
The key to the company’s business model is to install routers in heavily trafficked locations – location owners are responsible for arranging their own data connections. The routers cost $37 and installation is roughly $100. Smith says it generally takes just a few months of advertising to earn back the sunk costs.
This assumes, however, that locations have at least 10,000 page views. The average coffee shop gets about 7,500 page views, so break-even takes longer. Meanwhile, the average hotel gets over 100,000 – with some getting many multiples above that.
While AnchorFree has aggressively launched, it is in a competitive space. It also can’t require location owners to provide the service for free; it can only recommend it. But the service is differentiated by the appeal of its advertising, says Smith. Other companies only provide advertising on the landing page. AnchorFree has ad spaces built into every page, and can even deliver a multipage ad series.
The ads on the network, however, are not especially local. There is a heavy dependence on national ad networks, remnant ads etc.. Looking forward, Smith says he definitely wants to see more local targeting. The company is currently in discussions with local media companies to act as resellers. Since locations are precisely targetable, a flower seller in Rockefeller Center, for instance, could theoretically buy an ad for the three block radius.
I don’t see any longterm viability here – with WiMAX around the corner, any of these smaller players have only a small window of opportunity.