Large airports in the US are teaming with AT&T to give travelers 40 minutes of free Wi-Fi in exchange for viewing a 30-second advertisement, reports the NY Times. Half of the busiest airports in the United States now have free Wi-Fi, including Denver, Las Vegas, San Francisco, Phoenix, Portland and Houston.
That type of sponsored access is one way airports are balancing consumer pressure for free access to Facebook, Twitter and e-mail accounts with the cost of providing a bigger pipe for growing data needs.
Cloud Nine Media is aiming to bring more WiFi to the world by allowing businesses to provide WiFi as a service, but offsetting the costs with video ads.
Cloud Nine has built a sponsorship network that includes thousands of brand-safe locations in North America, and grown a client roster that includes brand names such as Google, Amazon, and AOL. WiFi sponsorship campaigns are sold on a Cost-per-Engagement (CPE) basis.
Airports and hotels are also turning to tiered pricing models: offering limited Internet access free and a faster premium service to customers willing to pay.
Some notable larger airports have also embraced free Wi-Fi, including Reagan National and Dulles airports in Washington. By July 2, Raleigh-Durham International airport in North Carolina plans to introduce a tiered Wi-Fi service, with 45 minutes of free advertiser-sponsored access. Dallas-Ft. Worth is the latest airport to go free, using the video ad system.
Denver International Airport, which has offered free advertiser-supported Wi-Fi since 2007, is switching to a tiered pricing model this week. Even with its free service, Denver International airport has about 10,000 daily Wi-Fi users — double the number in 2008 but still less than 10 percent of the travelers who pass through the airport each day. Working with Boingo Wireless, the airport is upgrading its network to give travelers free basic Internet service or more bandwidth for a $7.95 day pass (for a laptop) or $4.95 an hour (for a smartphone). The Boingo contract guarantees the Denver airport a minimum share of the Wi-Fi revenue — more than $500,000 over three years for the airport — with the potential for higher earnings as advertising opportunities evolve.
With flight cutbacks decreasing the income airports receive from landing fees, non-airline revenue has become more critical to airports, which have also been lobbying the government to raise the passenger tax that helps pay for airport facilities.
Christian Gunning, a spokesman for Boingo Wireless, which operates free, paid and tiered Wi-Fi networks at more than 60 airports worldwide, said the hotel industry had led the way as Internet pricing models evolved.
“Ten years ago, pretty much every airport was pay and pretty much every hotel was pay,” he said. “Some of the midtier hotels started to go free, then everybody did it, and it was a race to the bottom.”
“No one wants to pay for anything, but everything needs to be state-of-the-art or people complain,” Mr. Gunning said.