Will 2014 bring free, ad-supported phones and data?

Smartphone users check their devices over a hundred times a day, making those home screens the most valuable digital real estate in the world for advertisers.

By Benzinga Nov 26, 2013 4:36PM

Woman sitting on steps with smartphone © Image Source, Image Source, Getty ImagesBy Jim Probasco

How would you like a free mobile phone with free calls, texts and data thrown in for good measure? In exchange, would you be willing to put up with advertising?

In a recent AdExchanger column, Russell Glass, CEO of Bizo, said with 1.4 billion smartphones in use by the end of 2013, the most valuable digital real estate on the planet is the home screen of those devices.

It's only a matter of time, Glass said, before someone develops and offers a "completely advertising-and content-supported phone." And that time, he believes, is coming soon -- as early as the end of next year.

The reason is simple. On average, according to Glass, consumers check their phones about 110 times a day. That's 110 opportunities, per day, per phone, to deliver product advertising to a captive audience. Glass said it works out to more than 3000 "impressions" per month, per smartphone user.

Using the home screen for ads is only part of the picture. In exchange for a free phone and service, Glass said consumers would be willing to agree to location and buying habits tracking, all designed to help advertisers target consumers with relevant ads. This already happens with hundreds of apps used on mobile phones people pay for so transferring the cost to advertisers for many people would be a "no-brainer."

In addition, Business Insider noted that advertiser supported content is already "baked into the cake," so to speak, with television and radio broadcasts long a part of the American consumer experience. The difference with mobile is scale. With mobile devices accounting for almost one-fifth of U.S. media consumption, the temptation to take advantage of that potential scale is just too great for advertisers.

As Glass said, "The benefits to the market are endless. First, the cost of manufacturing a mobile device is relatively low compared to the value of this volume of rich, digital user impressions. With some simple math, you could see how a company could profitably fund a person’s device and supporting services just via serving home-screen advertisements."

While admitting that the logical would-be players in advertiser-supported mobile devices would include Facebook (FB), Microsoft (MSFT), or Google (GOOG), Glass said he believes the first entry in the market will be a group of venture capital backed former Google or Facebook engineers who form a startup. (Microsoft owns and publishes MSN Money.)

Glass also predicted that model would fail at first but that eventually we would see a number of mobile devices available that would be completely free to own and use.

At the time of this writing, Jim Probasco had no position in any mentioned securities.

More from Benzinga: 
Nov 26, 2013 4:50PM
For a free smart phone with unlimited talk and text, I can ignore 100's of ads.
Nov 26, 2013 5:07PM

Phones and plans cost too much.
I'm grandfathered in a plan from 10 years ago. I use my phone....AS A PHONE!!!
$39.95 a month with free 3 day weekend.
I'll hold onto it for as long as the 3 year old Samsung Highlight I have lasts.

I refuse to pay $30-$50 extra for the data plan or another $700 for a phone.

I've had it with advertising!!!  I don't watch regular tv at all any more.  When I surf the net, I avoid the videoplayers because every time you want to know more they show you a 45 second commercial before they show you what you wanted to know.  You go through watching the same 45 second commercial  50 times a day and you get sick of it!!!!  Its repetitive and it is unnecessary and blatantly annoying.  id pay to have regular tv shows that DIDNT have commercials!!!  dont mess with my phone
Nov 26, 2013 5:53PM
the goverment will get tax anyway/remember nothing ever free
Nov 26, 2013 10:37PM

keep your phone, I am sick of advertisement.  i'd rather pay for my phone.



Nov 26, 2013 7:54PM
I wouldn't do it. They will be able to fallow your buying habits or traveling habits. Weather it be at a restaurant or a store. Its like having an annoying car sales man fallowing you every where. Imagine your phone ringing or beeping every where you go cuz your near by a business and they have a sale. I cant stand junk mail from post office and this is the future for junk email clogging up your phone space.
Nov 26, 2013 6:21PM

poor people = soylent green , give me free stuff

Nov 26, 2013 9:19PM
Or just get you an Obama phone.  LOL
Nov 26, 2013 6:05PM

I can't believe there are only 5 comments on this thread! Wow, the government is well on its way to knowing who we are, where we are, and what we're thinking!!!

Nov 26, 2013 5:41PM

Free phone for ads, this got Amazon written all over it, a lot of people would take it though

Nov 26, 2013 8:41PM
I feel inundated now so I would not be in favor of a phone screen covered and taking up space on my device at any price. Stick it.
Nov 26, 2013 10:40PM

people of all age here in Mississippi already have free phones. everything is free here, food ,medical, house what else do you want


Nov 26, 2013 6:41PM
On the other hand ... sure give me a free phone chocked full of ads, and I'll find a way to HACK it !
Nov 26, 2013 10:50PM
  Any chance you morons will grow out of your fancy walky talky juvenile fixation?
Nov 26, 2013 6:02PM
I'm gonna wait for a Motorola gizmo for free and $20 a month pre paid.  Now, that's a deal!  Unlimited talk and text and the ads I can put up with.  How about HD 3D holograms of callers thrown in? 
Nov 27, 2013 9:32AM
about as much marketing sense as Rolex putting up a billboard in front of a homeless shelter.
Nov 26, 2013 6:38PM
Nope, I will stick with my cheap triple minutes for life burner phone!
Nov 27, 2013 11:09AM
No thanks!!  I honestly would rather continue to pay than have my location and buying habits be hack---I mean---tracked.
Nov 27, 2013 12:42PM
The more I think about this, the more I wonder if it will succeed.  Remember the "free" ad-supported internet providers?  And 'free' computers?  Inferior products and services that went away.  Not due to regulation but because no one wanted them.

Nov 27, 2013 12:36PM
Please put your seat backs in the upright position, secure your trays and fasten your seatbelts as we begin our descent into Hell.
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