InterAD ready to launch ad-supported ISP

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Hoping to marry broadcast-style advertising with interactive media, Cincinnati-based InterAD Group is testing a free, ad-supported Internet service provider network it plans to roll out in at least 11 cities by next year.

But the recent failure of Hypernet, a San Francisco-based ISP, which pulled the plug on its free ad-supported "Cyberfreeway" Web service in July, shows InterAD's Tritium Network could face an uphill battle.

Following a Cincinnati test next month, the Tritium Network should have more than 100,000 users by next year in markets that include New York, Los Angeles and Boston, said Michael Lee, president of InterAD. A possible deal with an undisclosed national service provider could push that number up faster, he said.


In return for free Internet access, Tritium users will get a roughly 1-inch ad banner across the bottom of the browser. Ads will vary based on user demographics and change every 30 seconds.

Advertisers will pay a cost per thousand of $40 based on the number of active users who see their ads.

Doubts about how much users actually see of Web ads has called traditional impressions into question, Mr. Lee said. But since users can't stop Tritium's ad graphics from loading or scroll past them, they're exposed to ads for 30 seconds, compared to three to five seconds for the average Web ad.

InterAD claims to have signed more than 40 Fortune 1,000 advertisers for its test, including financial services heavyweights American Express Co. and Prudential Securities, along with Nine West Corp.'s Easy Spirit women's footwear brand and Clopay Corp. building materials.

"This could deliver significant reach numbers vs. the niche ideas out there now," said Easy Spirit VP-Marketing Randy Scott. He also likes having the ability to target only female users.

"It sounds like an interesting idea, and we're looking forward to seeing how it works," said a spokeswoman for Prudential.


However, the ad-supported model didn't fly for Hypernet, which never got above 10,000 users. Free Internet access wasn't enough; more marketing support was needed to overcome user doubts that free access was too good to be true, said Hypernet President Donald Tuttle.

Meager interactive ad budgets, combined with high costs of operation, make ad-supported ISPs chancy at best, said Rick Smith, partner in Maloff International, an interactive media consultancy.

Hypernet may try again, possibly offering free Internet access but charging for e-mail and personal Web pages. Using that proposition, the company has signed up 250,000 users in Tokyo and is expanding to Korea, Mr. Tuttle said.

"Somebody is going to make this work," he said. "Maybe it will be Tritium."

Copyright August 1997, Crain Communications Inc.

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