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What It Means for Consumers and Brands That New York Is Becoming a 'Smart City'

Citywide Wi-Fi offers advertisers flexibility

David Etherington is chief strategy officer of Intersection, which handles ad sales for the network. Photo: Chris Loupos

On a sunny January day, a young mother strolled along New York's West 107th Street, explaining a strange phenomenon to her son. Before cellphones, there used to be these things along the sidewalks you could put a coin in and make a telephone call from, she told her bewildered child. She might as well have been describing a wringer washing machine.

By the relatively recent end of their life cycle, those pay phones dotting the Manhattan landscape had largely been beaten into a state of dysfunction. But soon, they will be replaced by sleek, Wi-Fi-enabled kiosks, making New York home to the most advanced citywide wireless network in North America.

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This is one of a couple of dozen cities around the world edging ever closer to becoming what is known as a "smart city," an urban location tightly connected with advanced forms of technology involving not only mobile devices and ads but sophisticated forms of healthcare, energy, transportation, property management, and waste and water systems. A city must be advanced in several of those areas in order to become a smart city, according to market research and consulting firm Frost & Sullivan, which projects that there will be 26 such cities worldwide by 2025. What's more, "there will be hundreds of cities that will try and adopt one or two smart city areas over the course of the next few years," says Archana Amarnath, a global director at the firm.

Aside from New York, cities including Rio de Janeiro, Singapore, Lisbon, London, even Kansas City are aggressively seeking to become smart cities, with Singapore aiming to become the first "smart country." But for now, all eyes are on New York, whose old pay phones have in recent weeks been swiftly getting replaced by kiosks powered by LinkNYC, the city's free wireless network. LinkNYC is "first and foremost a utility for the people of the city that also doubles up as an advertising network. It has the fastest Internet speed available—not only is it enabling Wi-Fi in the city, but it's at gigabit speed," says Mike Gamaroff, head of innovation at the global out-of-home firm Kinetic. (Subscribers of cable or telco data plans are able to get 20 or 30 megabit speeds at best, he notes.)

The LinkNYC locations are, in fact, the only places in North America where a consumer can get gigabit-speed Internet service, says Nick Cardillicchio, strategic account manager at Civiq Smartscapes, designer and manufacturer of New York's kiosks. On a cold, wet afternoon this month, Cardillicchio provided a tour up Manhattan's Third Avenue, north of 14th Street, where the first kiosks, known as Links, have been installed. All told, 16 Links are up and running, as part of LinkNYC's initial test.

Each of the kiosks looks almost like a giant smartphone on an imposing, silver pedestal whose customized surface makes it difficult for street artists to add their own personal touch. Perhaps it's little surprise, then, that Civiq is a spinoff of a company called Comark that makes tech devices for the military. "We manufacture equipment that's meant to survive in battle zones," as Brad Gleeson, chief commercial officer of Civiq, puts it.

Cardillicchio describes the inside of the kiosks: "There are multiple single-board computers in the link. Each major subassembly has its own dedicated computer so we can independently track [a kiosk's functions], providing the most reliable health reporting and monitoring capabilities and ensuring the greatest uptime."

As for the exterior, each Link prominently features a 55-inch diagonal digital screen on each side. Ads for Poland Spring, MillerCoors, Pager and Citibank are currently in rotation. The kiosks will eventually feature smaller tablet screens that can be used to place voice or video calls free of charge anywhere in the U.S. Via the Links, consumers can also access information about the city, including maps and directions and things to do, as well as emergency information. The Links also act as charging stations for mobile devices.

Meanwhile, the star attraction of LinkNYC—the speedy, free Wi-Fi service—is accessible within at least a 150-foot radius of each location, though it can be accessible up to 400 feet. In other words, a New Yorker could kiss his or her ISP and data plan goodbye—if, that is, they live really nearby and aren't so concerned about security issues. (It is much too early to assess the smart city's impact on ISPs like Time Warner Cable, Verizon and Comcast—but at a time when cord-cutting is an urgent concern, the prospect of "free Internet for all" cannot come as a comfort.)

The company behind LinkNYC, CityBridge, isn't saying when the system will move into commercial phase, but once the network is fully built out over the next several years, it will feature at least 7,500 and possibly as many as 10,000 kiosks, making it one of the largest digital OOH networks in the world. (The more immediate target—and contractual obligation—is 500 Links operational by the end of this July.)

CityBridge is a partnership of Civiq, mobile company Qualcomm and Intersection, which is responsible for all advertising sales. Intersection is owned by a group of investors led by Sidewalk Labs, part of Google parent Alphabet. Sidewalk's chief executive and Intersection's chairman is none other than Daniel Doctoroff, who was New York deputy mayor under Michael Bloomberg when talk about repurposing the old, unloved and unused pay phones first started.

In many respects, LinkNYC is hard not to love. It is free of charge to the city's residents and visitors, CityBridge is splitting the ad revenue with the city, and those involved say the city stands to make $500 million off the screens over the 12 years of CityBridge's contract. "We believe that we'll be in a positive cash-flow position within about five years," says Gleeson, adding that projection is dependent on how well the network is embraced by Madison Avenue and on the length of time it will take to achieve a critical mass of kiosks.

That build-out is no small feat. "We are pulling something like 400 miles of virgin fiber through the streets, which is a very arduous thing to do," says David Etherington, chief strategy officer at Intersection. "That's like driving to Boston and back."

Intersection has a lot of "dreams and aspirations" for the ad network, says Etherington. "Digital out of home has traditionally been sold inside a loop, typically over a four-week period. We don't agree with that. We want to allow advertisers much greater strategic and creative flexibility"—for example, dayparting and hypertargeting.

"One of the innovations is data capture, as well as interactivity and addressable advertising," Barry Frey, president and CEO of the Digital Place-based Advertising Association, says of LinkNYC.

Frey went along for the ride during Cardilliccio's recent Third Avenue tour, coming away particularly impressed by how the kiosks will allow advertisers to co-locate their signs and fund services to the public like free Wi-Fi and long-distance calls.

As far as how brand marketers can benefit from the smart city, one need look no further than MillerCoors to understand how the Link can work. Using data from the music service Shazam at each location, the brand's "Sounds of the Streets" campaign features lists of the most-Shazamed tunes in the area.

Another early advertiser, Poland Spring, is running a more traditional digital ad over a five-week period, the creative touting the brand's popularity in New York. "It really resonated with our consumer target, which is a slightly older millennial and urban—someone we think of as a 'connector,' someone who's seeking out new information and sharing new technology," says Shauna Legatol, regional marketing director for Nestlé spring water brands, including Poland Spring.

It is the data element that has grabbed the attention of Helma Larkin, CEO of OOH firm Posterscope. LinkNYC is a little vague about how exactly it captures data, but it insists its methods keep a consumer's private information just that—private. Link captures data like age, gender and behavioral data from the wireless devices of those who join the free network, according to a source. A Link can track individual mobile devices as they move within its radius, making the determination, for example, how long a consumer stands in front of a kiosk. The company is also using third-party data to round out the information.

"I would consider it a new out-of-home medium completely, because the vision is to have an online experience when it comes to data that will enhance the media itself," says Larkin. "Think about it as screens with data behind them, coming from the units themselves. What's come before are digital screens retrofitted with data techniques."

What is especially notable about LinkNYC, Larkin adds, is "the opportunity to build this from the ground up. They expect to develop audience data from the consumers who will be in front of the screen, which will help us with the planning aspect."

Neither the Poland Spring nor MillerCoors campaign has produced enough data to determine the system's effectiveness so far, says David Krupp, CEO, North America, Kinetic, which guided both efforts. But, he adds, "I think the data side is going to be very significant, because we'll have a much more hypertargeted connection to consumers based on their behaviors and what journeys they take during the day."

For her part, Larkin is intrigued by LinkNYC's plan to allow advertisers to buy on a daypart basis, and the ability to get data on consumers based on the time of day.

Link is envisioned to go far beyond serving only major advertising clients, however. Says Etherington, "Our ambition is that this network will not just serve the largest brands, but also small enterprises in New York. Eventually we'll get to the point where if you just want to buy one [screen] at a certain time and it's available, it's all yours."

At this point at least, there is nothing in any U.S. city approaching LinkNYC, even though strides are being made in markets like Kansas City, which is developing a smaller, advertiser-supported network of kiosks that feature wireless services provided by Sprint. Ad sales in Kansas City are being handled by Smart City Media, whose leaders once managed City24/7, which created and piloted a wireless network program for New York before CityBridge won the contract with the city.

Meanwhile, other U.S. cities are actively working to become smart cities. Gleeson says Civiq is in talks with around 20 such markets.

On an international scale, the smart city is also taking shape, with each market customizing a network to best serve its city. Renato Lucio de Castro, a consultant on smart city projects, is, for example, currently helping Rio de Janeiro on a smart city venture tied to the 2016 Olympic Games, which take place this summer. "They are putting together [private ad networks of OOH signs] that haven't been connected before to help communicate with people in the city who need information about the Olympics," he explains. "They'll also be able to communicate with people during catastrophes, like flooding or landslides."

A major challenge for those focused on smart city solutions remains finding those in local government who share the vision for what projects like LinkNYC can accomplish, and the will to make them a reality. Still, Michael Lake, president and CEO of Leading Cities, an organization devoted to helping cities get smart, believes projects like LinkNYC will continue to catch on—not only because of the ad revenue it brings municipalities but because of other benefits like, for example, cameras for street surveillance.

Says Lake: "I think you're going to find that they're a no-brainer for cities."

This story first appeared in the Feb. 15 issue of Adweek magazine. Click here to subscribe.

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