According to the Yankee Group, advertising should be part of a well-balanced business plan for wireless community networks. The plan also requires a broad portfolio of revenue sources that includes government anchor tenancy, subscribers and value-added business services. Cities with the population size and demographics of Minneapolis or Boston could realize as much as $7 million annually from advertising revenue once the network is fully built out. This projection underscores the impact web-based advertising for community wireless broadband networks can have in driving revenue and service opportunity in a market that is still in its infancy.According to the recently published Yankee Group Note,
Web-Based Advertising Is Critical for Community Wireless Business Models, advertising is not an argument for a free network but it is an important ingredient for community networks to achieve financial viability. Community broadband wireless' value proposition is multifaceted. In addition to direct revenue return, the benefits for advertising include its ability to:
* Foster community relations
* Promote tourism
* Build a platform for delivering future services based on content as well as connectivity
* Serve as a marketing vehicle to drive users to a subscription model
"At a time when business models are coming under heavy scrutiny, investing in web-based advertising can make the difference in producing viable business models for community Wi-Fi networks," said Roberta Wiggins, research fellow in Yankee Group's Enabling Technologies Research group. "Community broadband wireless networks create a defined population of broadband subscribers that national and local advertising can attempt to monetize at home or on the go."
Government officials and service providers should carefully examine the business opportunity for web-based advertising on community networks. While local governments want their networks to share in advertising revenue, they do not want to put government at risk or be responsible for content or contractual agreements. As part of the private-public partnership, wireless internet service providers should agree to manage advertising-related activities on behalf of the city.
