The Internet is a tool that simplifies interactions, transactions, and education. Due to rising income inequality, fewer low-income U.S. citizens have disposable income for cable and Internet services.
A Pew Research study found that only 54 percent of households with annual incomes of less than $30,000 have access to broadband at home. This is especially troubling because the number of young adults ages 18 to 29 who identified themselves as lower or lower-middle class has nearly doubled in the past six years. In 2008, a Pew Research study found a quarter of all young adults identified as being in the lower or lower-middle class; today, about twice as many do (49 percent), a 24-point increase. Why is this cause for concern? Young adults ages 18 to 29 have the highest percentage of Internet usage - the most among all age groups.
As lower-middle class incomes decline, more people rely on Wi-Fi service outside the home. In response to this, public libraries have become a destination for free Internet access. A report from the American Library Association shows 62 percent of libraries report that they are the only source of free public access to computers and the Internet in their communities. A Pew Research study found that 66 percent of those who used the Internet at a library in the past year did so to do research for school or work. A growing majority of that 66 percent is the millennial generation.
What are the implications of this for brands and marketers? It presents an opportunity to rethink how location-based marketing budgets are allocated and to invest more heavily in sponsored Wi-Fi service. Subsidized Internet access enables brands to increase awareness, create positive equity, and attract business.
The millennial audience, which many brands depend on to be their online advocates, is over-represented in lower income brackets. Brands need to make strategic investments in Internet access to engage with this demographic.
In recent years, several franchise and quick-serve restaurants have introduced sponsored Wi-Fi. This tactic generates more foot traffic and increases sales. Free Wi-Fi has become ubiquitous at Starbucks locations from coast to coast - building more equity in the "third place" strategy described by chief executive (CEO) Howard Schultz.
Google has been instrumental in providing free Wi-Fi through public/private partnerships with cities to enable local users (especially those close to Google office locations) to access the Internet. Although free Wi-Fi is available in many urban areas, there is a potential for broad growth.
Sponsored Wi-Fi gives brands access to an audience who values connectivity and is willing to share personal information for that connectivity. It allows brands to choose the location where they can subsidize Internet access for users. Wi-Fi sponsorships shouldn't just be used to generate awareness - but to encourage action. Understanding when, where, and why users are accessing the Internet provides opportunities to connect. Tailored messages can direct users to touchpoints (a store, kiosk, or interactive POS display) and attract price-sensitive customers with special offers or discounts. Third-party services allow integration with sponsor brands' social networks to increase opportunities to engage with users before and after they connect to the Internet.
Although in these instances users may not pay for Wi-Fi access, they intuitively know that nothing comes for free. Email addresses or time spent watching a sponsor-branded video are the price of entry for "free" Wi-Fi access. New research from IBM reveals that 40 percent of consumers are willing to provide their mobile number to receive text messages containing marketing messages and 32 percent will share their social media handles in order to get information that's pertinent to them. An encouraging result for brick-and-mortar businesses from the same research shows that 36 percent of consumers would be "willing to share their current location via GPS with retailers." Brands that provide "free" Wi-Fi access to support their location-based marketing can deliver highly targeted relevant messaging about user location in relation to their stores.
Sponsored Wi-Fi adds a new dimension to the timeless marketing maxim - "Go where the customers are." As the number of people accessing the Internet outside of the home increases, it's essential that public Wi-Fi availability does, too. Brands that use sponsored public Wi-Fi can benefit - whether through increased awareness, market data, or an incremental sales boost. People want to stay connected and brands should be doing their part to make that happen.
Meet Your Favorite ClickZ Contributors
Many of ClickZ's leading expert contributors will be at ClickZ Live, the new online and digital marketing event kicking off in New York (March 31-April 3). Hear from the likes of: Jeremy Hull, Lisa Raehsler, Andrew Goodman, Bryan Eisenberg, Mathew Sweezey, Aaron Kahlow, Stephanie Miller, Simms Jenkins, Jeanne S. Jennings, Dave Hendricks and more!
McNeal Maddox is a senior strategist, brand development, Digital, at Siegel+Gale, based in Los Angeles. His first experience with brand development came in junior high, when, not content to remain mere consumers of comic books, he and his brother formed their own comic book company. The brand name, logo, and signature style they created were so strong that one of their books is a permanent part of the Lynn R. Hansen Underground Comics Collection of Washington State University Library's special collections archive - and they even sold a few.
Since joining Siegel+Gale, McNeal has worked for several clients including Microsoft, Dow AgroSciences, McAfee, Genworth Financial, Yahoo, United Talent Agency, Activision, and PayPal. McNeal previously served as a project manager at FoxSports.com, where he managed the design, development, and implementation of customized promotional campaigns for major advertisers. He also worked as a web developer at ING Advisors Network.
McNeal graduated from Carnegie Mellon University with a BFA in graphic design, and received his MBA from the University of Southern California.
March 19, 2014