Article

Kiosk market makes gains in Spain

Kiosk deployers with eyes on a global presence shouldn't overlook the Spanish market, where just 16 percent of 40 million people are wired Internet users. Infrastructure changes in southern Europe also signal a growing opportunity.

April 9, 2002 by

Myth: As kiosk applications in the U.S. are becoming part of everyday life, Spain is light years away from bringing this technology on board.

Reality: Spain is making the transition and is bursting forth onto the kiosk scene.

The kiosk market in Spain is indeed moving along. To understand why, consider the culture, people, and infrastructure that exist today. Many Spaniards have a limited view of the Internet, using it only for exchanging e-mail. The challenge for kiosk deployers is to educate citizens on the opportunities available in e-commerce, and persuade them to use the Web in different ways.

Spain is a fertile market for kiosks. It is approximately the same geographical size as Ohio, Indiana, Illinois, and Michigan combined and has an overall population of nearly 40 million people. Just 16 percent of the population uses the Internet.

Opening the market

The country's telecommunications industry includes a number of wireless providers challenging the established and regulated telephone system. An inadequate communications infrastructure slowed the development of competition. Smaller upstarts see mobile Internet access as an opportunity to leverage new technology and gain a foothold in the telecommunications space.

Several companies have moved to build a solid presence in Spain. Telefonica's Terra.comacquired the world's third largest portal, Lycos. Deutch Telekom purchased Jazztel's Ya.comfor nearly $500 million dollars. Those companies are now established as players in the future of Spanish telecommunications.

Other major players are ready to make a mark on Spain. AOL's Avant, the European arm of AOL Time Warner, announced it would begin operations in the spring of 2001 after signing an agreement with Prodigios.com.

The British giant Vodafone, owner of the American wireless firm Verizon and its new Pan-European portal Vizzavi.com, plans to revamp Airtel Movíl and its portal Navegalia.com. That will create another giant in the fight for this blossoming market. With these and other deals done, it's no surprise that Spain has become a key part of the global strategy for many multinational firms.

Technology needed

Success in the Spanish kiosk market won't come overnight for any firm. It will take careful planning and patience, and a long-term vision. A strategy for growing a kiosk market must consider slowing computer hardware sales throughout Europe and a reduction in discretionary spending due in part to high energy costs. Simply placing Internet access terminals in public places is not a complete strategy.

The next generation of WAP (3G) wireless devices may be the "magic pill" that provides a breakthrough. The current crop of handheld devices is years away from replicating the functionality of full desktop PCs. There is an enormous gap between what users want, out-of-home access, and what wireless providers can offer as solutions today.

To help bridge the gap, a variety of public Internet access applications have burst onto the scene in Spain. Cyber cafés have experienced high usage and are gaining a broadening appeal. Last year, EasyEverything - the cyber café division of the British airline EasyJet - opened several successful 200-seat operations in both Madrid and Barcelona, with plans to open others in the near future. The main drawback is a limited access to applications.

Of course, providing free Web surfing on kiosks is the most efficient way to entice the public to surf the Web. Highly visible kiosk locations that provide easy access will attract more users to kiosks. To set that up, a strong collaboration between the telecommunications groups, the ISPs, and the kiosk network providers is essential.

Advertising essentials

The kiosk provider must also develop strong relationships with sponsors. A lack of funding and slow revenue growth has plagued kiosk providers in the past. The challenge of providing value to sponsors and end-users has been difficult. While sponsors may see a kiosk as a good branding opportunity, their decisions are often based on return on investment (ROI), and it can be difficult to show that to a potential sponsors.

Strategic placement of kiosks in segmented or targeted demographic locations is one way to fill a sponsor's needs. By spending budgeted advertising monies on specific target audiences, promotional value can be quantified. The kiosk provider must give the sponsor accurate, timely, user-specific activity data to validate the kiosk as a valuable and unique form of advertising.

In most cases, Spanish sponsors and advertisers are more concerned about local and/or regional market stimulation than establishing a global presence, while quite the opposite is true of large multinational branded corporations. Most Spanish language portals are used both by Spaniards and Latin Americans, as well as hundreds of thousands of U.S. Latinos.

Kiosks may increase user awareness, brand recognition, serve as a promotional vehicle and affect consumer behavior. Actually, kiosk advertising resembles television advertising in many ways. It provides repeated exposures and encourages Web site visits. Consumers remember the images they see and respond by going to advertised Web sites, dine in the restaurants, shop in the stores, or buy from the featured company.

Taking advantage

Wherever kiosk networks are located, they must provide both an educational experience to the user and add value to the Internet experience, while providing a return to those supporting it.

The opportunities for a successful kiosk network are unlimited for those who approach the opportunity carefully. Southern Europe is in need of an "out-of-home " Internet access alternative that a public kiosk network can fill.

There is an opportunity to provide an appropriate and fresh medium for ISP's and advertisers. Building a compelling reason for people to sample or change to a new brand name product, by utilizing a public access kiosk or helping them to make a decision to act on a particular suggestion, is simply using basic business fundamentals. Brand and name recognition is the reason successful businesses advertise, period.

This article provided by Charles and Robert Porter of Net-BlueBox