• by February 9, 2001

It came as a surprise to some when NetZero, the frontrunner of the free ISP group, announced a roll-out of a premium fee- based access service called NZ Platinum this week. At $9.95 a month, paying subscribers won’t be required to accept ads as they are on NetZero’s free service. But NetZero will still expose its paying users to advertising, through its start- page portal and its email service.

Now the ad industry is evaluating the benefits of advertising on Free ISPs all over again, so I thought I'd remind you of something we found a few months back.

An eternity ago (back in September), Nielsen//NetRatings said that free Internet Service Providers (ISPs) were en route to proving themselves as a viable ad medium. The ad community was intrigued - these things allowed for more flexibility in ad delivery, as well as in their content. Also, they could provide for more precise targeting and more complex advertising models than traditional on-site means. Additionally, NetRatings said advertising on free ISPs reached a more active Internet population than traditional online ads - free ISP surfers, who generally fall into the 25-34 year-old bracket, log on 20 to 27 times per month, which is four to 10 times more often than average.

NetRatings also said, however, that several factors would limit the services' appropriateness for media buys in the future. For example, the ISPs' user demographics skewed toward lower-income users. While the services did report a few high-income users, a large percentage reported a household income of less than $25,000.

Not a dream target audience by any stretch, which explains lack of advertiser support, NetZero's slipping earnings and the decision to charge some for service. Surprisingly enough, it seems NetRatings research was right on target.