IFarm Network, which launched its Funcow.com Internet Club in Toronto and Montreal last month, is the latest in a slew of free or low-cost Internet Service Providers that are quickly building large, captive, Internet-savvy audiences ripe for the picking by online marketers.
The Toronto company’s main offering is a yearly Internet service membership for $25.99. In June, it also plans to launch a free Internet service aimed at the student and teen market, says John McDonald, marketing and public relations administrator for iFarm Network.
Funcow.com offers the same services as many traditional ISPs, including e-mail, a search engine, daily news, stock quotes, weather and shopping, but at a fraction of the cost. Yet, while it will rely to some degree on advertising and membership fees, iFarm hopes to generate the bulk of its revenues by adding e-commerce functionality to its site and collecting transaction fees for purchases that are made by its members.
iFarm currently has alliances with 200 e-merchants and affiliates, including Chapters, Indigo, CDUniverse, MP3, Reel.com, CDPlus, RealGoods.com and Sony Music Direct, and it plans to launch its own online stores to sell gifts like chocolates and flowers, and perhaps even computers and apparel, McDonald says.
‘The free [Internet access] market in particular hasn’t had a big e-commerce focus,’ says McDonald. ‘Right now, it’s a very powerful direct marketing tool for advertisers, but I think it could eventually become much more involved with e-commerce.’
In the existing free ISP model, advertisers pick up the Web user’s Internet access bill in exchange for the right to collect personal information about them and target specific ads to their computer screens. Users of Funcow.com’s soon-to-be-released free teen-targeted offering will be marketed to based on their demographic profile via ads that remain visible on the computer screen at all times while the user is on the Internet.
Members who pay for Funcow.com’s yearly membership plan, however, will not be asked to provide personal information, he says, and they will have 100% viewable space without fixed banner ads.
Free ISPs have already taken over the U.S. marketplace, with NetZero, the largest ISP in the U.S., leading the way. By 2003, more than 13 million U.S. households are expected to actively use free ISP services, according to a December report by New York-based Jupiter Communications. While the free model will not displace traditional for-fee models – most online consumers are more concerned with download speeds and reliability, than cost – the free market is expected to continue to experience rapid growth in the U.S., Jupiter says.
Last year marked the debut of the free Internet access category in Canada and, although it is not yet experiencing quite the same growth or competition here, the pace is picking up. Toronto-based TurboShuttle launched its free HomeFreeWeb.com service Canada-wide in the fall. Meanwhile, Calgary-based Cybersurf Corp., which also began serving the Calgary, Edmonton and Toronto markets last year, is now primed to offer its free e-mail and Internet service, called 3Web to the Vancouver market in April.
Cybersurf recently announced that its 3Web Network has amassed over 270,000 subscribers, making it one of Canada’s largest Internet Service Providers. Based on the network’s current growth rate – 1,500 to 3,000 people subscribe daily the company says it should have no problem hitting the one million-user mark by Labour Day.
In an effort to drive users to its Funcow.com site, iFarm is currently offering a daily draw for a free computer. It hopes to attract up to 500,000 members by year’s end.
This year, iFarm has set aside just under $4 million for advertising. It has already been promoting the service on radio and is about to debut newspaper ads in both Toronto and Montreal and television commercials on local Toronto stations like Citytv and CFTO. It is also setting up booths in Toronto and Montreal malls to distribute Funcow.com CDs, and will begin handing them out at universities and student hangouts once the free service is launched this summer.
iFarm also plans to roll out a program whereby the company will equip about 400 coffee houses and retail locations in Toronto and Montreal with computer systems and Funcow.com Internet access. The systems, designed to create awareness and encourage e-commerce revenues, will be free for visitors and shopkeepers to use. No timeline for that initiative has been announced.
