• by June 21, 2002

Kmart, Yahoo and Spiegel joined up because their customers like the free Internet access—and the ads they see while connecting to it. Reviewing the free ISP BlueLight.com (a Spinway, Inc. partner) on the epinions.com rating site, a user named Wayne Arnold writes: “My kid loves the short video and music you get while connecting. I haven’t had the heart to tell him it’s a commercial, because, heck, I like it as well.” A consumer saying they really like rich media ads? What gives? Even more startling is the notion of consumers enjoying interruptions by any ads at all during their online experience.

“By being able to deliver fresh new advertising during the dead time of dial-up, BlueLight.com has a unique way to reach our consumers that goes beyond traditional banner advertising,” said Fran Maier, vice president of marketing at BlueLight.com. “With full motion video, our advertising is not confined to simple text messages—we can use the full power of television-quality commercials to build our brand. In addition, it was important for us to be able to deliver these advertisements to all of our consumers, which Spinway's technology allows us to do at even the lowest connection speeds.” Media buyers evaluating Spinway have rallied around the BlueLight example, because of its relationship with part owner, big-brand Kmart. When a user dials up to BlueLight.com, he or she sees an already-downloaded Kmart “Changing for the Better” campaign featuring the Judd sisters, or Martha Stewart Everyday’s product commercials—all while the service connects. This obviously advances the Kmart brand online and off with minima{ïÌ­trusion into the user’s privacy.

But why will consumers buy into the free ISP concept? Will Kmart shoppers’ attention be attracted by the “bluelight special,” no-cost offering? What would cause them to stay in the secure realm of AOL, Earthlink, or some other pay-ISP instead of switching to BlueLight?

Interestingly, BlueLight’s initial marketing research indicates that “fears about a lack of security and not knowing the technology or understanding it were the biggest issues for consumer,” says Dave Karraker, Communications Director for BlueLight. “But as long as you can provide a value proposition, people will sign up.” So does this mean that the BlueLight/Kmart Spinway relationship only attracts thrifty individuals who may have lower incomes than say, those who voluntarily pay for Internet access? Absolutely not, says Karraker.

“Right now, about 40 percent of the people who sign up for BlueLight say they never had internet access before, because they just got a computer; 30 percent come from AOL, and are using us as a backup. That says to us that we’re reaching a new population and really reaching the Kmart shopper, which includes a lot of people who were not online before, or were unhappy with their service elsewhere like at Mindspring or AOL.”

Spinway has found in its research that over 58 percent of all users signing up across their entire partner network—including BlueLight, Yahoo, Ace Hardware, Spiegel, Iwon.com, and snowball.com—have college degrees; 40 percent of them also make upwards of $50,000 a year.

Whatever the numbers, over 3 million people have signed up for the Spinway service, either online, or in one of their partner’s brick and mortar stores. Says Spinway’s VP of Marketing Maura Rodgers, “With an average of 30,000 new subscribers a day, we’re growing three times faster than any other pay or free ISP.”