The Road Taken

Re: Wi-Fi and Smart Cities: Getting Smarter and making money

Back in the day, in New York city, the Democratic Party organization — Tammany Hall — provided the links between citizens and elected officials, finding jobs for Mrs. Magillicuddy’s son, raising money for family operations (and start-ups), reporting to our elected leaders, both locally and nationally, on the mood of the electorate, and handling local concerns. Of course, this was a big reason why so many Irish immigrants ended up in New York and Boston. The ‘organizations’ helped with the transition and made it possible to raise your family and live a full life. In exchange, of course, they got your vote. If you were loyal to the Party, they would be loyal to you. That was the currency of the day.

Today, of course, technology has taken over the process of engagement, and Cities all over the world increasingly recognize that if they want to compete for the best and the brightest, they need to get smart(er) about their communities. For jobs today, we go to LinkedIn and Monster, for money, we go to VCs, angels, and crowdsourcing solutions, to buy stuff, we increasingly go to Amazon, and to gauge the mood of the country, we go to Facebook and Google, which are getting smarter and richer by the day, monetizing insights in previously unimaginable ways. Also, between IoT and the ever-expanding universe of brilliant apps, there will be more and more integration between citizens and technology. You do not have to be Nostradamus to think that Wi-Fi will be critical for a lot of this growth, and knowing a little about that business, it generates a lot of enthusiasm for what is to come.

A few weeks ago, Claus Hetting’s organization (WFN) held a conference in DC, and they had companies ranging from Cincinnati Bell to Transit Wireless to Intersection Media all discussing ways to engage with the communities they serve, all talking about wireless development efforts. It was inspiring.

· Cincinnati Bell put together a network with 120 Aruba (?) APs in a four-block downtown area to serve crowds coming for the MLB all-star game in 2015, and since then have started monetizing it with managed Wi-Fi services, advertising, push messaging, contextually-based relevant local marketing opportunities, analytics and a mobile app (Connect Cincinnati). As of last month, they had completed 34M data sessions, and their app was downloaded more than 100,000 times, with people returning, to date, eight times on average. They did all this AFTER the city said it could not help with the project, and have recently been getting inquiries from SMBs who will pay to participate in the programs they are developing!

· In New York, Transit Wireless both developed and is now monetizing Wi-Fi in the subway stations (277 stations, a $300M investment for DAS, Wi-Fi and fiber, and 5,000+ APs). As of March 2017, they have 10.5M sessions per month (a 13% increase from the previous month), along with 1.2M Uniques for the month. They are developing sponsorship opportunities, cellular offload services, device analytics, roaming services, on-demand advertising and B2B subscriptions, and they are not even on the subway cars yet. Have you ever gotten off the subway and asked yourself — where should I go for a drink, to hang out, or whatever? Wouldn’t it be great to have reliable connectivity and insights about those questions?

· In New York, aboveground, Intersection Media, an Alphabet[1] venture, is creating the largest and fastest Wi-Fi network in the world, using old phone booths as steroid-enhanced hot spots with Ruckus APs, and prospective revenues from advertising, sponsorships, and various other services. They are also launching a similar service in London, working with PrimeSight and BT. In New York, they “only” have 800 units deployed so far, but their plan calls for more than 5,000 units, and they are also getting staggering amounts of engagement — almost 150M sessions since launch; a 3900% increase in the number of sessions since the launch month — which is not surprising to anyone in the world of Wi-Fi.

· In Denver, Tampa, San Jose, and many other cities, there are ongoing efforts to capitalize on various datasets to reduce costs, expand services and generate revenues, and we are still in the early stages of development here. [2]

One big question that hovers over many of these initiatives is whether they can be made self-sustaining. A popular answer is ‘advertising’, and the good news is that the potential is enormous, but there are challenges with that solution that must be addressed to turn Smart Cities solutions from conversations into accomplishments.

Last year digital advertising outpaced print and TV advertising for the first time.[3] It was epic, and exceeded almost all predictions for when it would occur, and there are two reasons why. First, analytics. Second, insights. These are essential elements needed to drive Smart Cities development, and there are great lessons from the market to help developers capitalize on these opportunities.

First, a little background. In terms of analytics, if you know that a person shops at Starbucks, the movie theater where ‘Moonlight’ is playing, and the local Orvis Store, comes from San Francisco, is a registered voter, has 1300 friends, is in a relationship, went to Stanford, and clicks on Denver Bronco videos, you might communicate differently than if you know that they watch CNN, or read an article from Forbes about the growth in manufacturing in Malaysia. You cannot get this level of audience analytics from television or magazines. However, literally ALL the growth in digital advertising last year went to Google and Facebook. [4] That does not mean they were the only successful advertising vehicles; just that overall, digital advertising growth diminished last year, once you take away to ever-growing success of these two companies getting smarter and bigger each year.

In terms of insights, marketers of all kind are seeing more data analytics than ever, and they are providing unprecedented insights to support advertising expenditures. Distinctions like who is most susceptible to messages from influencers and which beer is most popular with Bronco fans during the game are providing marketers with better ways to focus their messages. Traditional advertising vehicles simply cannot compete. Leading marketers are being exposed to predictive analytics, machine learning and cognitive computing capabilities, and as the success of the tech giants demonstrates, they are investing in a big way in the solutions being offered. The best ones have studied at the feet of Golem, er, Google, and are infinitely more knowledgeable and sophisticated than they were even 5 years ago, never mind 15 years ago. It is no longer enough to say ‘we have a lot of visitors’.

One irony is that the biggest data companies — Google, Amazon, Facebook, and Apple (the “Big Boys”) — are getting a lot of these insights from the networks that local Wi-Fi network operators are providing for their guests, visitors, fans and/or other users.[5] There are 100M+ Wi-Fi networks, all paid for by the venues where they are located, and they provide the platform for users to send data to the biggest data companies[6]. In other words, Wi-Fi network operators are paying for the platform, whereas the Big Boys are generating the revenue, providing increasingly focused and insightful information for marketers.

There is, however, an equally, if not more, valuable alternative messaging vehicle out there that can effectively compete with the big data platforms, and that is local venues, working with Smart Cities initiatives in various communities, where there are an ever-increasing number of insights and analyses. The challenge has been scalability, and that is diminishing as more and more idea merchants recognize the value that Smart Cities projects can generate. Moreover, there are myriad data sets out there than can be integrated to support various initiatives, and we have all just started to develop them, never mind appreciate how they can assist in enriching our communities. Parking apps can help event logistics, and various transportation options can both facilitate traffic flow challenges and inspire pre- and post-event activities, thereby increasing tax revenues, fostering economic growth and enhancing community guest experiences.

In 2017, most stadiums, hotels, train stations, airports, malls and even restaurants offer Wi-Fi networks, but the pressure to upgrade is relentless, because the array of services that can draw on these networks is growing by the month[7] (increasing the data demands), and almost all venues are wrestling with how to make the networks less demanding from an investment standpoint, if not self-sustainable. Insights about the propensity to visit restaurants after certain events, along with various transportation options for getting there, the propensity to purchase sports paraphernalia when the home team is scoring touchdowns, social media celebrations about the shared excitement of “being there”, and the various traffic situations around the City. Offering tours of the City to people in a hotel for the weekend is also a competitive advantage on the local front, and being able to provide both transport and restaurant reservations to people at a conference, or as part of live performances, can also generate marketing and purchasing opportunities if the venue is providing a great experience to the prospect when they start thinking about how to spend their money.

More and more companies are providing venue operators with more insights and analysis that will be essential for effectively competing in the market, and no category of business will benefit more than Smart Cities, given the numerous data sets from various city-based data discovery efforts that can be integrated into marketing efforts of one kind or another. The current thinking reminds me of the ways that local cable advertisers used to market their ad services, back before the turn of the century, but there are various companies getting smarter about the opportunities, and the key message here is that there should be a lot more coordination and a lot less competition, because for those people and companies who lived through the “Walmart invasion’ of small town America, and saw what it did to local merchants, the lessons are clear. To paraphrase Benjamin Franklin, either we must all hang together, or most assuredly, we will hang separately. If we do, there are no limits!

Stephen Cunningham, Founder, DinA (Data-in-Action Analytics), an analytics company that collects data and generates actionable intelligence from IBM insights generated through Watson’s cognitive computing.

[1] Google’s parent

[2] The CTO of Washington DC sharing his data with web developers and inviting them to participate in a contest to create apps that would serve the City. They spent $25K advertising the contest, and $25K as a prize. It was a 30-day contest. They received 47 apps which had a market value of $2.3M, only one of which received the prize, but all of which were thereafter available to the citizens of Washington DC for services ranging from (a) DC Location-Aware Realtime Alerts- iPhone users can download this free app from the App Store to see the location and type of crimes that have been committed near them in near real-time. They can also see the nearest metro station based on their current location, including the next two inbound trains in each direction. (b) DC Crime Finder — which can determine your location and return specific instances of various crimes based on a 1, 2 or 3-mile radius. © Park It DC, a web app that allows you to check a particular area of DC for parking information. It helps you discover whether the spot you’re headed to will have meters you’ll have to pay, or if they’ll be free. The app can also help you avoid a ticket for parking in a Residential Parking Permit zone, and (d) DC Historic Tours — which gives users the ability to view routes, photos, and review of historic locations in the DC area all in one place.

[3] https://www.emarketer.com/Article/Digital-Ad-Spending-Surpass-TV-Next-Year/1013671; https://www.emarketer.com/Article/US-Digital-Ad-Spending-Surpass-TV-this-Year/1014469,

http://www.marketingcharts.com/traditional/us-online-and-traditional-media-advertising-outlook-2016-2020-68214/

[4] This does not mean there were no other digital advertising vehicles that grew, just that there were many whose ad revenues shrank. https://www.recode.net/2016/11/2/13497376/google-facebook-advertising-shrinking-iab-dcn.

[5] For example, when we operated a Wi-Fi network at a conference recently, 300 people used the Wi-Fi network during one day of the event. 248 of them generated data that Google extracted, and almost 200 generated data that Apple extracted. Between the 178 people who went to Facebook and the 234 who went to Instagram, there were other extractions going on as well.

[6] https://www.ipass.com/press-releases/the-global-public-wi-fi-network-grows-to-50-million-worldwide-wi-fi-hotspots/

-

[7] 2.3M iphone apps as of March, 2017, up from 30,000 in 2009.