The WeatherBug window is displayed at start-up and whenever the temperature icon in the system tray is clicked on.

In this example, Ameriquest Mortgage is sponsoring the entire screen for 48 hours in what is called a “brand wrap.”

With a brand wrap, the advertiser turns the entire weather display into an attractive company billboard; a unique online advertising opportunity.

AWS Convergence Technologies

2-5 Metropolitan Court
Gaithersburg, MD 20878
www.aws.com

Contact:
Andy Jedynak
VP Business Development
ajedynak@aws.com
Ph: (301) 258-8390 x143> Fax: (301) 948-5352

I am not a weather junkie, but I live in Seattle where it’s important to plan outdoor activities during what’s called “sun breaks,” brief periods in the Northwest when the sun breaks through the clouds (not the other way around). Until recently, I checked the weather on Weather.com or WeatherUnderground, but have never been particularly satisfied with either of these choices due to the annoying advertising, especially popups (1).

Now, along with 13 million others, I am hooked on WeatherBug, a division of Gaithersburg, MD-based AWS Convergence Technologies, even though it has its share of advertising annoyances including the occasional popup (2).  What sets WeatherBug apart from the rest is the real-time temperature visible in the Windows system tray; its attractive look; and its hyper-local weather conditions reported from its weather stations located at neighborhood schools.

For the advertiser, WeatherBug provides a unique, albeit pricey, marketing opportunity. Just like physical time-temp signs, WeatherBug allows banks and other companies to private brand the weather display, turning it into an online billboard complete with interactive advertising.

Privately held AWS Convergence Technologies was founded in 1993. For most of the past 10 years, the company has focused on building its network of weather stations and selling the information to radio and television broadcasters. Today, its 6,000-station network SchoolNet provides data through more than 100 broadcast partners serving nearly 80% of the country.  Schools purchasing the $5,000 weather station receive services designed to bring the weather data into the classroom. See www.classroom.aws.com  for details.
 

In March 2000, AWS released WeatherBug, a browser plug-in (i.e. program) that runs on users PCs.¹ Within a year, WeatherBug was in use by more than 3 million customers (see Table 1). In July 2001, WeatherBug surpassed Weather.com in monthly page views (215 million vs. 189 million). Currently (mid-August 2002), the company has more than 13 million users and continues to sign up 30,000 more every day.

In a remarkable demonstration of just how cheap Web users are, only 26,000 (0.2%) users buy the ad-free Pro version priced at $19.95/year. The company expects this total to rise significantly as it improves the visibility of the ad-free option.

How it Works

1.       Users download a 3.2 MB browser plugin (taking up to 8 minutes on 56k modem); the plugin does not require a computer reboot.

2.       The plugin automatically selects the closest of nearly 6,000 professional-grade weather stations, most operating at K-12 schools.

3.       Real-time temperature is displayed in the Windows system tray whenever the computer is connected to the Net.

4.       If you want to know more than the temperature, you simply click on the system tray icon to launch an entire weather display including:
- time
- current temp (on a thermometer display)
- the day’s high and low temps
- wind speed & direction (on a compass display)
- humidity
- dew point
- barometer
- rain today
- rain rate
- rain this month
- two-day forecast
- sunrise/sunset times
- moon phase

5.       Additional buttons lead to:
- extended forecast
- current and forecasts for other areas
- Web cams to view local conditions
- radar
- email alerts ($20/yr pro version only)

Table 1

WeatherBug Total User Milestones

Source: Company press releases

WeatherBug also offers unique opportunities to tie a branch-banking network into the online services:

•  In-branch real-time weather display: Current weather conditions could be delivered to in-branch PC displays using a private-branded Bug. On the high end, a $10,000, 42-inch plasma screen could hang on the wall or be mounted overhead. On the cheap side, a $50, 15-inch PC monitor sitting on a table or desk could do the same thing.
•  ATM weather display: Weather conditions could be displayed onscreen through Web-enabled ATMs.
•  Branch-based weather stations: Bank branches could become weather suppliers to the AWS network. Then anyone in the vicinity of the branch would be able to check weather conditions at a known spot, their local bank branch. With a one-time cost of $5,000, this could be a low-cost way to drive new business to the branch, especially for new branches. It would also be a good draw for local media coverage.
•  Branch-based weather station with Web cam: Same as above, but with a live Web cam streaming pictures from the branch along with weather data. Web cam pictures can be accessed through WeatherBug. The cost for a weather station with Web cam is $10,000. Benefits are similar to the previous option, except with a Web cam pointed to the street, the bank branch could also serve as a way to check local traffic.

¹There is currently no Mac version, though the company expects to eventually have one.

Although no banks have yet purchased private-branded Bugs, a number of financial companies have advertised, including ING Direct, DiscoverCard, GetSmart, ConsumerInfo.com, and AmeriQuest Mortgage.

The private-branded program has primarily centered on approximately 100 radio and TV broadcasters who share in the advertising revenue of their WeatherBugs. Only a few non-broadcasters use the private-branded program: a golf and a yacht club provide it as a member benefit, especially appropriate for expensive pastimes impacted by the weather.

The company recognizes financial institutions as a good target market, but is not proactively courting banks at this time to due to resource constraints. However, the company does want to get its foot in the door of the financial services industry and hinted that the first few reference accounts would be able to negotiate a favorable package (see Costs below).

Advertising on WeatherBug ranges from $1 per thousand impressions for one of two available banner ad spaces (top and bottom) to $5.50 per thousand for a full brand-wrap (screen size = 433 x 625). for more information.

The list price for the private-branded Bug is $0.50 for each user that registers, then $0.25 per active user per month (i.e., $3/yr). Currently, there are no minimums, so even smaller banks and credit unions could use the private-branded approach.

Notice how the advertiser’s message is interspersed throughout the WeatherBug display.

It’s tough to cost-justify the private-branded WeatherBug program. Unlike most businesses, you already have a locked-in base of customers who visit your Web site multiple times per month. So paying upwards of $3 per year just to put a pretty thermometer in front of your own customers is probably not a good use of your already stretched budget. Indeed, the key to making it pay off is to get non-customers to buy from you. But given the cost, you only want highly qualified prospects to use it. Unlike most advertising that is a one-time cost, private-branded WeatherBug costs continue month-after-month.

At $3/year it’s virtually impossible to make it work. But, a bank or group of banks, planning on signing up several hundred thousand users, and agreeing to minimum usage levels, could expect significant discounts on the $250 per thousand users per month list price.² For example, a 67% discount would bring the cost down to $1 per year per user. If over the course of the entire year, you were able to sell services to 1% of all users, your acquisition cost would be $100; if 2% bought, acquisition costs would be $50, and so on.

If that’s too rich, consider offering WeatherBug as an enhancement/upgrade for high-value accounts or as a premium for new accounts, especially products that tend to be single-service such as mortgages and credit cards. Mortgage customers could be given a free “homeowners” WeatherBug that, along with the financial institution messages, could also include messages appropriate to homeowners, such remodeling, insurance, and other homeowner services. Credit/debit card customers could get a shopping- and credit management-oriented WeatherBug that reinforced use of your plastic and cross-sold credit report monitoring, balance transfers, and so on.

To limit your costs for non-customer users, you could put an expiration date on the program. As the end-date approached, you could tell users that their service was ending unless they signed up for an account or paid a subscription fee.³

¹Not comparable with advertising CPMs because user is using a private-branded extension of their desktop.

²We are speculating given AWS’s stated desire to land banking clients and the fact that its marginal costs to support additional users is quite low.

³Of course, customers could easily download the application again from WeatherBug and continue to use it for free.

Table 2

WeatherBug Costs

Source: Company, Online Banking Report, 8/02

Discover Card brand wrap. 

Recommendations

With its 100%-registered user base, WeatherBug allows advertisers to precisely target their online impressions. Pricing is flexible enough to work as a marketing tool for banks, credit unions, and other financial companies of nearly any size. Banner advertising or sponsor wraps could be targeted to a narrow range of zip codes for
just hundreds of dollars per month. Of course, your advertising department, agency, or media buyer will
need to determine the effectiveness of this advertising medium against others.

The more intriguing opportunity is deploying a private-branded bug that sits in the Windows system tray, a constant link to the weather, and by association, to your bank. Banks jumping in this year would likely be the first in their market with such a program. While it doesn’t hold the same appeal as free checking or 3.9% HEQ loans, at a maximum of $3/yr, it could be a cost-effective promotional device, especially if the duration was limited.

First movers would benefit from positive press, an interesting and understandable in-branch promotional opportunity, and an increase in online traffic. If bundled with a profitable bank service, such as credit report monitoring, it could be a good moneymaker.                                             

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