Public Wi-Fi Monetization via Advertising

Abstract

The proliferation of public Wi-Fi hotspots has brought new business potentials for Wi-Fi networks, which carry a significant amount of global mobile data traffic today. In this paper, we propose a novel Wi-Fi monetization model for venue owners (VOs) deploying public Wi-Fi hotspots, where the VOs can generate revenue by providing two different Wi-Fi access schemes for mobile users (MUs): (i) the premium access, in which MUs directly pay VOs for their Wi-Fi usage, and (ii) the advertising sponsored access, in which MUs watch advertisements in exchange of the free usage of Wi-Fi. VOs sell their ad spaces to advertisers (ADs) via an ad platform, and share the ADs' payments with the ad platform. We formulate the economic interactions among the ad platform, VOs, MUs, and ADs as a three-stage Stackelberg game. In Stage I, the ad platform announces its advertising revenue sharing policy. In Stage II, VOs determine the Wi-Fi prices (for MUs) and advertising prices (for ADs). In Stage III, MUs make access choices and ADs purchase advertising spaces. We analyze the sub-game perfect equilibrium (SPE) of the proposed game systematically, and our analysis shows the following useful observations. First, the ad platform's advertising revenue sharing policy in Stage I will affect only the VOs' Wi-Fi prices but not the VOs' advertising prices in Stage II. Second, both the VOs' Wi-Fi prices and advertising prices are non-decreasing in the advertising concentration level and non-increasing in the MU visiting frequency. Numerical results further show that the VOs are capable of generating large revenues through mainly providing one type of Wi-Fi access (the premium access or advertising sponsored access), depending on their advertising concentration levels and MU visiting frequencies.

Monetizing Mobile Data via Data Rewards

“…For example, Riggins in [18] studied an online publisher that offers both the fee-based and ad-based versions of its website. In [19], a Wi-Fi network provider allows users to either directly pay or watch ads to access the Wi-Fi network. In [20], an app developer offers virtual items, and each app user will either pay or watch ads to obtain them in the equilibrium.…”

“…Therefore, our work studies a novel structure, and derives new insights for the joint provision of fee-based and ad-based services. Furthermore, our work considers the operator's capacity for providing the service and the advertising's wear-out effect, which were not considered in [19] and [20].…”

“…Let r ∈ {0, 1} denote a user's data plan subscription decision, and x ∈ [0, ∞) denote the number of ads that a user chooses to watch (during one month). We allow x and the advertisers' purchasing decisions to be fractional [19], [28]. The amount of data that a user obtains from its subscription and ad watching is Qr + ωx.…”

“…A widely considered setting is that each user has a logarithmic utility function (e.g., [29], [30]) and a uniformly distributed type (e.g., [19], [36]). We can verify that this setting satisfies the sufficient condition in Theorem 2, and hence we have the following proposition.…”

“…However, the differentiation here affects the ad display rule as well as the pricing, so it is non-trivial to prove Theorem 4. For example, one conjecture is that given any (ω, p) which is feasible to (18)- (19), the operator can choose the same ω and set p I = p II = p in (20)- (23) to ensure that the value of objective (20) is no smaller than that of (18). In fact, the conjecture does not hold, because (ω, p I , p II ) may be infeasible for (20)- (23).…”