Free-to-Use Ad-Supported Smartphones: Crazy Enough to Happen
Last week I had one of those “whoa” moments, where an idea appears so perfectly-formed in your mind that you start channeling Keanu Reeves just a little bit. I was writing about SmartAds, that project to pay you to view ads on your smartphone’s lock screen. With a little over one week and $48,000 to go on its fundraising campaign, I’m not very confident that it will ever see the light of day, but the idea of being paid $25 a month just to put up with a few ads planted a seed in my mind:
It’s totally possible to offer smartphone service in the $20-$30 a month range. What if a carrier gave users the option for totally free smartphone service, supported by advertising?
Now granted, I think this is a horrible idea. I’m a recovering privacy nutjob myself, and while I’ve learned to live with my emails residing on Google’s servers, I’m still not quite to the point where I’m comfortable sharing location data. What I can’t deny, though, is that different people place a different value on things like privacy, and there’s a generation growing up now that has very different notions of it than mine might; when there’s been a Facebook for as long as you can remember, you’re going to have a certain perception of the difference between public and private worlds, and the idea of monetizing your exposure to pervasive advertising might not sound so crazy.
We’d be talking about something a whole lot more involved than SmartAds, though. A carrier involved with an idea like I’m proposing would want to get more out of this arrangement than an occasional glance from its users at a static lock screen ad. After all, their advertising partners would need to see results sufficient to make their costs worthwhile, so fully location-aware advertising might be key. When your phone detects you’re entering the local mall, you’d get a notification of offers from nearby stores, or maybe even encouragement to check out the other mall down the street which just signed-on to advertise through your carrier.
Heck, I wouldn’t be surprised to see carriers ask for, and users willingly provide access to their social networks. Mention McDonald’s in a tweet, and you start getting alerts about the restaurant’s new breakfast sandwiches.
If mobile payments ever catch on, I’d expect to see that made an integral part of this experience, as well. That would provide invaluable data on where your spending money actually goes, and bring the whole advertising relationship full circle.
The reason all this could work, and why we don’t see things like ad-supported laptops, is because of just how pervasive the connection with your smartphone is, and the vast opportunities that creates for targeted advertising. For advertisers, that “targeted” bit is key, and by placing their ads in front of eyes that are most likely to respond, they can maximize their advertising dollar; the possibilities offered by smartphones are practically a dream come true.
Could all this advertising income really sustain smartphone service? Experimental carriers like Republic Wireless have beaten the $20 mark, but considering the unusual nature of that service, it might not be a fair benchmark. T-Mobile has $30 plans with more than enough data for smartphone users, and Virgin Mobile has similar offerings starting at $35. I’m not sure how realistic SmartAds’s $25 estimate might have been, but if we’re in the same general ballpark, and advertisers are able squeeze just a little more exposure out of their access to users, this very well might be plausible.
I doubt bring-your-own-device would be an option here, as this advertising would need to be deeply baked-in for it to be effective, but I’m still unsure what that could mean for device selection. Maybe users would have their pick from several budget models, bought out-of-pocket. Maybe it would be possible to subsidize the cost of the phones themselves through advertising, though that might reduce the quality of hardware that we can realistically consider.
That also raises the issue of service agreements. A free service like this is going to be very attractive to people not interested in sticking around for the long run, and that poses a problem for advertisers; their ability to target users will become more accurate over time, the more information on them and their spending habits that’s able to be gathered. This could lead to the necessity for contracts, if only to enforce early termination penalties.
We could also see requirements for minimal use, perhaps mandating so many interactions with your phone within a given time period, or even setting a minimum for how many times you’d need to patronize an affiliated retailer. I don’t pretend to have answers for a lot of the details on just how this would work, but I think there’s enough potential here around which to construct a realistic business model.
Of course, an ad-supported smartphone is only useful when you’ve got people actually using it. Would you ever consider using a device like this, saving yourself from monthly phone bills, but so blatantly surrendering yourself to the advertising powers that be? As a counterpoint, do you think this could eventually be something slowly forced upon us anyway, only without the benefit of the kind of subsidized service I’m talking about?