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Starbucks opens up opportunities for brands to reach mobile customers

Starbucks continues to add opportunities for brands to reach mobile customers via the in-store Wi-Fi available in many locations thanks to a new partnership with Boingo Wireless.

The coffee house chain has named Boingo Wireless as its exclusive Wi-Fi advertising and sponsorship partner. In addition to the static banner ad previously shown to customers before they can access the free in-store Wi-Fi, Boingo will offering additional ad units including IAB units and video interstitials beginning in the second quarter.

?Starbucks has had advertising on its Wi-Fi network for some time,? said Christian Gunning, vice president of corporate communications, for Boingo Wireless. ?Boingo is just the latest ad provider to service this network.

"Different advertisers have different interests,? he said. ?Our airport and hotel ad networks are popular among those focused on the travel industry.

?Consumer networks have much broader appeal ? and the ability to segment by time, location and device type allows them to really hone in on their target market.?

In-store mobile
The move points to the growing opportunities for brands to leverage public access and merchant-based mobile networks and merchants look for ways to leverage their indoor mobile networks to drive additional revenue via mobile advertising.

More than 7,000 Starbucks locations with Wi-Fi networks will soon be delivering the ads in Starbucks locations in the United States and Canada with Wi-Fi networks.

The move makes a lot of sense for Starbucks, which has built quite a reputation in mobile.

The coffee house chain already has seen significant success with its mobile payments app, which generates more than three million mobile payment transactions per week. These results point to a large mobile customer base that is very attractive to brands as Starbucks looks to expand its mobile prowess via advertising.

While Starbucks has been a leader in offering in-store Wi-Fi access, numerous other merchants are moving towards installing Wi-Fi, Bluetooth and other services as a way to offer indoor location services and, ultimately, to offer advertising (see story).

Cost per engagement
Boingo typically delivers a cost-per-engagement model giving users the option of viewing a short video ad in exchange for free Wi-Fi access.

The CPE model can make sense for network operators as opposed to display advertising ? where the advertiser typically pays a set fee for every 1,000 users who see the ad ? if there is a low volume of mobile views.

In the CPE model, the advertiser gets between 15 seconds of 45 seconds of branded engagement with the device owner, in a controlled environment that provides the advertiser with 100 percent share of voice.

Many users do not mind watching a short video in exchange for free Internet access, per Boingo.

Boingo also offers sponsorship opportunities such as type-in modules that provide the user with an open box to type in the sponsor?s slogan or tagline, poll modules that enable sponsors to deliver short surveys to generate primary data, and app delivery modules that enable users with the option to download the sponsor?s app in exchange for Internet access or premium content.

Optimized experiences
Ads delivered via the CPE model on Wi-Fi networks in public access areas such as airports and subway stations have been around for a few years.

However, as merchants continue to build out their Wi-Fi networks to provide another way to engage with in-store customers, some are beginning to look at ways to leverage these networks as a way to generate revenue via advertising.

Ads delivered via a Wi-Fi network also help merchants, airports and others offset the costs of upgrades to the networks so they can ensure the networks are fast, reliable and free for customers as data consumption continues to grow.

Mobile data use is skyrocketing as users engage with their devices for a variety of activities from watching video to shopping, with Cisco?s Visual Networking Index forecasting that global mobile traffic will increase 13 times by 2017.

?It doesn't really matter whether it's in-store, in-airport or in-hotel, one of the most important aspects is to optimize the user experience while keeping the advertising prominent enough to keep advertisers interested in the product,? Mr. Gunning said. ?It's a delicate line to walk, and one we're committed to collaborating with partners on to deliver the right user experience.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York