Dropping the banner

The latest enlistee in the free Internet wars has a not-so-secret weapon. Starting this August, Y-Pay.com will offer subscribers free Web access in return for viewing ads.

Not so surprising: Several advertisers, including Net Zero, have cut access prices for end users who agree to have their browser framed with ads around the border of the screen.

But Y-Pay has a distinct edge over those always-on ad models, said Michael Sheriff, president and CEO of Y-Pay. A contract signed with Ericsson Datacom will permit Y-Pay to target ads to specific groups by demographic, location or expressed interest - making the ads more effective and, in theory, less intrusive.

"Banner ads are declining in usefulness," said Sheriff. "If you're going to be effective with ads on the Internet, they have to mirror the medium that advertisers are used to working with - mostly television or print. Banner ads never fit that bill."

Ericsson's Internet Advertiser software targets ads to users based on data already in Internet service providers' subscriber databases or from information acquired at sign-up. When a subscriber logs on, Internet Advertiser begins pushing ads that fit the location, interests and demographic profile of the end user. If subscribers try to avoid viewing the ad, their connection is ended and they see a help screen instructing them how to re-establish access.

"The Internet has become a truly mass medium," said Mots Ericsson, Internet Advertiser product manager at Ericsson. "Now we have to give advertisers the same control they have with newspapers and commercial TV. And finding new revenue isn't just an option for many ISPs - it's a question of survival."

Sheriff said he was searching for something that would enable richer, more bandwidth-hungry advertisements and make advertisers feel more at home on the Web and thus allow them the kind of freedom and focus they're accustomed to getting in print and on TV. Because ads are downloaded in the background when the connection is not in use, they can use almost any rich content the advertiser wishes - audio, video, animation - without hogging an end user's bandwidth.

"Our target size is around 300 kilobytes," said Sheriff. "You can have a much denser experience at that size than you can with a 15 [kilobyte] banner ad." The ads are queued up to display instantly at CPU speed, and they're scheduled programmatically - meaning no competing ads back to back.

With nationwide connectivity from UUNet and GTE Internetworking, and 1200 points of presence around the country by the end of the year, Y-pay is planning a national footprint. But targeting means it won't be restricted to national advertisers, and it makes the experience less annoying for the end user.

"If you check off 'golf' as an interest, chances are that sometimes you're going to be logging on specifically to find Web sites for Callaway and Ping," said Sheriff. "This way, those ads will come to you and let you click to the companies' sites."

Y-Pay and Ericsson have developed a "polite" ad technology in which surfers can simply click on a teaser ad crawling across the bottom of the screen. If they do, they get a full-page ad that remains up for 20 seconds; if they choose to ignore the teaser, the ad goes away.

But will advertisers want to reach consumers who are getting free access? "That's the question," said Devin Brownlowe, e-commerce analyst for Anderson Partners. "Advertisers are drawn to disposable income. Y-Pay will have to attract subscribers who can afford to pay for access but are simply taking advantage of a convenient offer."

The provider will ensure that mix by striking deals to supply access to affinity groups such as clubs and credit unions, said Sheriff.