Most surveys of consumer preferences for ad-supported or paid-for services show that many consumers will tolerate ads in exchange for lower cash payments for an application or service, just as surveys show consumers prefer app advertising to “for fee” access models.
Two decades ago, the notion that computing, software or information technology could be supported, in part or in whole by advertising might have seemed insane. But to the extent that Facebook, Google and Twitter are IT products, advertising has indeed emerged as a viable revenue model for some IT products.
Ad support is common in many media and content businesses, though perhaps much more difficult these days as advertising budgets shift to newer platforms such as Google or Facebook.
Other revenue models include commerce and transactions; freemium models (some level of service for free, then additional for-fee service levels) and marketplaces (ride sharing, food delivery, merchandise marketplaces).
For that matter, donations might have seemed an insane way to sustain any large application, but Wikipedia and others have shown that donations can, in some cases, be a viable revenue model.
In the wild days of the internet bubble around the turn of the century, some companies tried giving away free PCs in exchange for purchase of internet access service. That might be considered a simple example of similar strategies some retailers have used in the past of giving new customers a gift in exchange for becoming a customer.
Some have tried to employ alternative models--including at least partial ad support--to generate revenue for core communications services such as mobile service or landline phone service. Free mobile service entirely supported by advertising has not worked well.
In the landline segment of the business, some have tried to build businesses selling appliances supporting home phone service (but without ads) using the internet and an adapter, such as Ooma.
But AT&T now seems to be considering using advertising to defray the recurring cost of mobile service.
One would be hard pressed to identify any such efforts that have proven sustainable in past years, but the logic is impeccable. Some consumers likely would be willing to be served up ads if it also meant lower mobile phone costs.
The logic is that advertising now is viable on screens of many sizes, ranging from movie theater screens to TVs to tablets and PCs to smartphones. By extension, the logic always has been, there might be ways to defray the cost of internet access, landline phone calling or mobile phone subscriptions using advertising, in part.
Moolah Mobile provides a platform for ads on mobile screens, and claims AT&T as a partner, as well as Amazon, Target and Walmart.
AT&T seems to be exploring the use of ad-supported communications for the very value-conscious segment of the mobile market. In past years, that has been the province mostly of mobile virtual network operators.
But with growth slowing dramatically, and with new competition coming (A bigger-than-AT&T T-Mobile, Dish, cable operators), even the value segment of the business is getting a new look.
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