Ad-Supported Communications Takes Scale
Entrepreneurs have been trying to create advertising-supported communication services for decades, with no success. Recently, mobile service providers have been trying to do so in the United Kingdom.
Samba Mobile is one such effort.
Blyk was another U.K.-based effort. But Blyk shifted course to become an advertising services provider.
OVIVO, another mobile virtual network operator using the advertising model has shut down. The crowdsourced firm had raised £440,000 from crowdsourcing site Crowdcube.
The OVIVO “Freedom0” plan gave subscribers 300 minutes of voice calls, 300 text messages and 500 MB of data each month.
Blyk and OVIVO might illustrate one of the strategic issues for ad-supported communications, namely the need for scale. Blyk, for example, could not create enough reach to interest big brands.
In the past, other would-be providers tried supporting fixed network voice services using advertising.
But even some service providers that wanted to create big ad-supported services have had to retrench. In the United States, RingPlus offers zero-cost mobile service offering 300 “no incremental cost” calling minutes or 50 free text messages per month, but using a freemium model, not the ad-supported model it originally favored.
RingPlus users can add credit to their accounts with a credit or debit card. And there is a $49 a month plan for people who want unlimited usage.
But efforts persist. Denver International Airport offers free domestic and global phone calling with a new advertisement-based service offered by RMT Free Phone, available at more than 200 landline phones throughout the airport.
The program is the result of a new partnership between the airport, RMES Communications and DIA's advertising agent Clear Channel Airports.
International calls are free for the first 10 minutes, with a charge of 25 cents for each additional minute, plus a 15 percent tax.
The phone service is supported through ad revenue. Each phone has a 17-inch LCD screen that will run 15-second advertisements and offer digital coupons.
Likewise, icall, supporting low-cost calling on mobile devices, originally pitched as an ad-supported service, now has switched to a Skype-style VoIP service.
Ad-supported content works for broadcasters because they have scale. Ad-supported software works for Google because Google has scale. Until an ad-supported communication service provider can attain similar scale, it seems doubtful it can succeed.ad-