VoIP: A Godsend for Advertisers?

Posted by: Olga Kharif on May 03, 2005

Poor advertisers. Since a bunch of us, consumers, had signed up for a special federal do-not-call list, our dinnertime has been sadly empty, free from telemarketers’ phone calls. A company called ViseonMedia hopes to change that, though. And, chances are, some consumers will gladly jump at the chance.

Up its sleeve, ViseonMedia has gotten a home phone with a 10.4-inch color screen that allows users to talk cheaply over home Internet lines, via a technology called Voice over Internet Protocol (VoIP), as well as receive video clips and music. Consumers can pick and choose what Web content they want to receive: They might watch Web cam footage of a certain street intersection during rush hour. Or, they might query the screen for the closest pizza joint. The phone will know its user’s exact geographic location and bring up a list of parlors within, say, a five-mile radius. Then, it would allow the customer to dial that company’s order line by pushing one button on this cool new phone.

Now, here’s the catch: As you do all that while cooking dinner (and most home phones sit in the kitchen), advertisers like Visa hope to push ads onto the device from time to time. The experience will be similar to getting TV commercials while watching, say, CNN, or a movie.

Here’s why consumers will put up with that: Sure, today, you can buy fridges with TV screens and Web connectivity, as well as Personal Digital Assistants and laptops that can hook onto fast-speed Internet through technologies like Wi-Fi (wireless fidelity). But these nifty toys cost anywhere from $500 to $5,000. VisiFone, however, will sell for around $100 – which is far below its cost. The cost will be subsidized by advertisers.

Now, what’s in it for them? Actually, they score a double-whammy. First off, they will finally be able to reach us during dinner again. Second, if we are interested in their ad, we’ll be able to contact them via phone or view their Web site with a touch of a button. Such ads can be highly effective, in other words.

The advertisers, including Visa, will be test-piloting the device in 5,000 to 10,000 household in the second half of this year. Then, the phone – which will likely also have Wi-Fi connectivity, so the screen can be taken all over the kitchen -- will become available through service provider Vonage, as well as, perhaps, several cable companies, by the end of 2005, says J.D. de Haseth, CEO of ViseonMedia, a subsidiary of Viseon.

There goes my calls-free dinner!

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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