What's Next, Ad-Supported Coffee? Actually, Yes

from the daily-fix dept

Tue, May 15th 2007 12:11am — Joseph Weisenthal

Ad-supported business models have been popular for a long time, but people still seem confused about when they make sense. For things like content or services with little marginal cost, the ad-supported model can be a good fit. On the other hand, it doesn't really work for physical goods, like computers, despite many attempts at pulling this off. Now a company in Japan is experimenting with an ad-supported coffee vending machine. If the buyer is willing to watch a 30-second ad, they can get a free cup of coffee. The cup will have an ad as well. The problem is that advertisers aren't likely to get much value out of this 30-second spot, such that it's worth subsidizing someone's java fix. It'd be pretty easy for a customer to just ignore the ad while waiting for their fill up. The one context where it might make sense is in an office where the employer already subsidizes its employees' coffee, and is looking to defray some of the costs by selling ads. Still, this might just annoy workers, and the lost productivity from spending time in front of the vending machine would probably cancel out any advertising revenue. Perhaps instead of an ad, the machine could use the time to play a daily motivational speech from the company's boss.

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17 Comments

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Nick, 15 May 2007 @ 1:36am

"When you take this cup of coffe, you take everything my great grandfather, my grandfather, and my father helped to build. All of their hopes and dreams poured in to a cup. So show them respect and go out there and do the best you can."

ugh i would hate to hear that everyday
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Roy, 15 May 2007 @ 1:36am

Enforce Ad
They can always ask a quick multiple choice question at the end of the ad to make sure the person was watching...
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Shohat, 15 May 2007 @ 2:08am

You are silly
You don't know much about anything, do you
Coffee ingredients cost very little (we are talking vending machine quality), electricity is somewhat of a problem, but this can be actually dumped on the person that wants the vending machine there such -as a hotel, or a supermarket... (you pay for coffee ,they pay for the electricity)
A free coffee vending machine which plays 30 second ads and has branded cups (sponsored by the advertiser, no cost here) that is stationed in the street/busy lobby is worth no less than 2000$/month for the advertiser.
Even though it's small money, 100 such machines can probably be a small successful company.
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Leon, 15 May 2007 @ 2:11am

Re: Enforce Ad
That's what Virgin Mobile does. You can watch ads to get free minutes added to your prepaid mobile, but they quiz you after, and you have to get the answers right if you want your free minutes. Some wag in a tech column pointed out that this business model was doomed to bust, since the only people with that much free time on their hands were university students and people who couldn't afford a real mobile. I bought a prepaid just to try it out and I ended up giving it a poor bloke on the pogey who needed a cell for emergencies, and I kept my regular mobile.
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The Swiss Cheese Monster, 15 May 2007 @ 3:52am

Re: You are silly
Apparently you don't know much either.
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Shohat, 15 May 2007 @ 4:05am

Re: Re: You are silly
I love pseudo-intellectuals.
You have no absolutely no idea what is right, but you have these neat names and witty comments.
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Just One Guy, 15 May 2007 @ 4:09am

30 second ads?
I'd take just about 30 seconds to prepare the cup of coffee anyway, so why not asking the guy to watch the screen instead of looking somewhere else while he's waiting? It's not that in an underground station or at a bus stop there's much around to look at anyway.

Furthermore, if the ad was interesting and fun, why not answering a quick question at the end? I don't see a problem: you have a captive audience, stationary, bored, waiting for their bus or rain to come in, dying for something else to do than looking at the same bored faces around them, day in day out.

Furthermore, coffee machines are EXTREMELY localized. You could get feedback on your recent TV ad campaign or localized info: which ad you liked best? What do you think will happen next in the storyline? Which upholstery would you choose with this body color? What would you think if our restaurants in the area (up the stairs, 100 yards down 34t street, to your left!) extended serving breakfast up to 11:30?

Collect this kind of information, cross it with socio-economic data about the location in which the coffee machine is located, and you have a pretty reasonable neighborhood profiling, bus stop after bus stop, underground station after underground station. At the cost of a few coffee cups.

Cheap cheap cheap!
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comboman, 15 May 2007 @ 5:45am

Pavlov's Dogs
Perhaps instead of an ad, the machine could use the time to play a daily motivational speech from the company's boss.
I don't know how well it would work in the real world, but it sounds like a good idea for a Dilbert cartoon.
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Celes, 15 May 2007 @ 5:49am

Re: You are silly
Unfortunately, this wouldn't be such a good idea in a hotel, or at least none of the ones I've worked in. Most hotels already offer complimentary coffee free of annoyances. And even if it takes a guest more than 30 seconds to make their own cup, the time isn't spent waiting. It sounds ridiculous, I know, but people just don't want to wait anymore. (Doesn't it seem like forever if a web page takes 30 seconds to load?) And the hotel industry is the one place where people never think twice about complaining about things like having to wait a full 30 seconds for a cup of coffee, believe me.

I do think there are venues where this might be successful, such as the supermarket you suggested, but hotels probably aren't it.
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|333173|3|_||3, 15 May 2007 @ 6:43am

Question answers
This could work if put up in the CS labs at at Uni, since then the students would, even if they had to watch a 30-sec ad and answer a question on it, still find that better than walking over to the Union cafe to buy coffee. Students are good at finding shortcuts in computerised test, adn they would be able to beat a coffee machine quickly.
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Jose Cuervo, 15 May 2007 @ 6:48am

Sort of Like.....
Watching ads to get a free cup of joe is sort of like having to view ads while you read a blog.

Oh, wait a minute......
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Marc Cohen, 15 May 2007 @ 6:50am

Ad Support
I agree that ad support for physical goods rarely works - except for ad specialties. The next big ad supported medium will be downloaded music. Check out the Ad Supported Music Blog at http://ad-supported-music.blogspot.com/.
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dogbert, 15 May 2007 @ 9:33am

Re: Pavlov's Dogs
free coffee, and throw in a foot massage, - i'm in!
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Anonymous Coward, 15 May 2007 @ 9:39am

Walking into a Starbucks is like standing inside one giant ad (gift card? CD? beans? french press? new frappacrappo?), but it takes five minutes and you still have to pay for your coffee.

Sign me up for 30 seconds and free.
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joe, 15 May 2007 @ 2:25pm

Works for me
I would drink the coffee and probably buy the advertised brand to help ensure my supply of free coffee. Even though then it's not really free.
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Daniel, 15 May 2007 @ 5:44pm

Heck, right now I just stand in front of the machine and pace back and forth while it brews my coffee. I'd watch an ad just for the entertainment value (as long as they showed a different one each of the cujillion times I get a cup of coffee each day).

But then, my coffee machines at work are free anyways, so maybe that isn't such a good idea.
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Nasty Old Geezer, 16 May 2007 @ 5:53am

Re: Pavlov's Dogs
How about those company announcements via e-mail that nobody reads anyway? Especially the really stupid ones, like where to evacuate in case of fire, who's gotten a promotion and is now uour new boss, or financial results that show your company's about to go under -- trivia like that.
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