One of the most common complaints among fellow business-travel road warriors is the high cost of Wi-Fi outside the friendly confines of our offices. It’s a topic that comes up continually in hotel lobbies and airport terminals as we struggle to stay connected with the flow of business. We all go through gut-wrenching internal debates about whether or not we should expense the $14.99 for a day of Internet access just so we can sync email and maybe Skype the kids before bed. Why is it—we often wonder—that Wi-Fi is free at Starbucks and McDonald’s, yet we must put up outrageous charges where we need it most—where we are already spending hundreds of dollars for hotel rooms or plane tickets? A recent article in Slate has gained some attention in suggesting that the time has come to free up Wi-Fi at every business. While that would be nice, the law of supply and demand won’t change things, until someone recognizes the opportunity for Marketing with Meaning.

In Slate, author Farhad Manjoo tells the story of how Starbucks was recently pressured to offer free Wi-Fi service because a plethora of its competitors have provided the free access—ranging from McDonald’s to nearly every corner deli and independent coffee spot. He writes that many mid- and low-budget hotel chains have begun to offer free Wi-Fi, including Best Western, Comfort Inn, and Holiday Inn. According to Manjoo:

“The sooner that hotels, airports, convention centers, and other similar places realize this, the happier they’ll make their customers.”

Sounds great, but don’t hold your breath. Just because people want, nay, need something for free does not mean that they will get it. The real purpose of my post today is to remind us that the simple economics of supply and demand come before any Wi-Fi routers go up.

In general economic terms, free services are most likely to occur when three rules apply: (1) the cost to provide the services is low; (2) consumers specifically desire the free services; and (3) and competition is also offering them for free. For example, restaurants provide free salt, pepper, and sugar at your table. The cost of these condiments is very low, people want or need access to them while eating, and because so many restaurants provide them for free it would be ridiculous to start charging. In the hotel market, we similarly see free shampoo, soap, in-room coffeemakers, turndown service, and wake-up calls.

Wi-Fi passes these tests in some cases. In the U.S. at least, Wi-Fi is very cheap to install and provide and it is definitely a service that consumers desire. However, competition is where things get dicey. Restaurants and coffee shops feel the competitive pressure because people have a pretty broad choice of where to sit down and spend their money. One could literally drive by a dozen spots in less than five minutes looking for those that have a “Free Wi-Fi” sign in the window. The same goes for those mid- and low-budget hotel chains, as they are frequently huddled together along the same interstate exit.

But this competitive shopping process is very different for high-end hotels and airports. The competitive options for business travelers are much more restricted in these markets, and Econ 101 tells us that less competition means monopoly-like “rents” can go to the seller. Yep, it’s unfair and economically inefficient when Delta charges $9.99 for Wi-Fi on a one-hour flight, or when your $400-a-night W Hotel makes you pay $19.99 for 24 hours of its horribly slow Net access. But these services become huge moneymakers when you are stuck with few options.

The other free market “failure” here is that most end users of high-end hotels and airfare are not the ones actually paying for the Wi-Fi access—it’s actually the employer who gets stuck with the bill when the expense report is turned in. This is similar to the reason our health insurance costs keep going up—the end patient is agreeing to (or even asking for) medical services that he or she never pays for. Now, just because all three of these guidelines are in effect does not mean that companies will choose to offer free benefits; but it does mean that this becomes a true marketing choice and investment—and I believe this can be one of the most meaningful marketing choices a brand can make.

There is one great airline example about how bucking the charging trend can be a marketing win. Charging for checked baggage is an interesting case where a reduction in competition led companies to cut back on a service that everyone enjoyed for free for years. The few big players—Delta, Continental,  American, and others—are now reaping big bucks thanks to this shift in the market. In 2009 they collected $13.5 billion in “ancillary services fees”—which mainly consists of new baggage fees.

But building on its Brand Purpose of “Democratizing Air Travel,” Southwest Airlines saw a huge opportunity in this shift. It was the one major airline that refused to charge its customers for up to two pieces of checked luggage. Not only did it keep its free baggage benefit, but it created a marketing campaign around “Bags Fly Free.” The results are pretty amazing: Southwest gave up an estimated $300 million in profit by forgoing the fees, but its differentiated service allowed the company to gain an additional 1% share of the market, which translated into $900 million in additional revenue—not to mention earning it ongoing customer trust and brand loyalty at a moment of truth. This was a marketing investment that clearly paid off.

What I find interesting is that it may be that only those services that “violate” my three rules above are noticeable by consumers and should actually be considered marketing investments. When you and all of your competitors offer something it is no longer differentiated, meaningful marketing, but rather just a cost of doing business. At what point does Wi-Fi at a restaurant just become the equivalent of ketchup?

Wi-Fi on airlines or high-end hotels is far from destined to be free, but it does offer an opportunity for brands to stand out by offering it. I am starting to see movements in this direction. For example, last week Sheraton offered me free (but slow) Wi-Fi because I am a Gold Starwood Points member. And Delta provides free Wi-Fi in its Sky Club lounges.

Perhaps there is an opportunity for an airline or hotel chain to differentiate by offering free Wi-Fi credits or codes directly to the company procurement and travel managers who are paying for accommodations at the end of the day. Imagine a loyalty campaign or points program targeting these key decision makers. Working through a travel provider such as American Express, Delta, or the W Hotel could offer free Wi-Fi to heavy corporate buyers. This could help break through the clutter, reward the most valuable end customers, and win a nudge of business when prices are about the same. Another “scale” option is to partner with a company such as Orbitz or Travelocity to show people that free Wi-Fi is, say, a $14.99 value when the price search results appear. A customer might decide to pay an extra $10 for a hotel room when he knows the $14.99 Wi-Fi comes free. And remember, the incremental cost of a hotel offering this benefit is near $0.

You might find it useful to use this post to trigger a thinking exercise on your brand. What is a service that your customers will appreciate, that has reasonably low costs to execute, and that your competition isn’t offering yet? You might just uncover a powerful Meaningful Marketing idea.

I am happy to report that two of the biggest traditional interruptive advertisers are finally getting it. This week I discovered incredible examples of how T-Mobile and McDonald’s are launching marketing that creates meaningful experiences for their target consumers. Both examples happen to take place in London; here’s hoping that their model spreads both geographically and habitually.

Over on our Marketing with Meaning community space on LinkedIn (where 367 people and counting have joined despite little promotion), Jonathan Levy shared a video of T-Mobile’s recent event in Trafalgar Square. The brand distributed 2,000 microphones, and more than 13,000 people joined to sing The Beatles’ ballad, “Hey Jude,” together. Here’s what it looked like:

This event is part of a campaign from T-Mobile called “Life’s for Sharing,” which brand representative Lysa Hardy calls, “…something that’s unexpected, wonderful, and exciting that you want to share with your friends and family.” The surprise sing-along was aired for the first time on the TV show Britain’s Got Talent last Sunday. This campaign execution follows a few months after the brand filmed a commercial in which dozens of improv dancers spontaneously appeared and performed at a Tube station in London.

After enjoying a special moment in Trafalgar Square, locals and tourists might have ventured over to Piccadilly Circus to take a picture with an entertaining digital sign from McDonald’s. No, it wasn’t another high-tech tool for ordering a Big Mac from your cell phone. Video describes it better than words:

Find more videos like this on AdGabber

Both the T-Mobile and McDonald’s examples are clearly examples of Marketing with Meaning. More specifically, they fall under what I refer to in my upcoming book as Branded Experiences. What I love about both of these campaigns is that they deliver on what the brands hope to stand for in their target consumers’ hearts and minds. T-Mobile recognizes that mobile phones are used in a very emotional way by people who want to enjoy and share life together. The McDonald’s vision statement is to make every customer smile. Instead of continuing to show us commercials that tell a story of some other people (actors) enjoying life and smiling, the brands finally understand that they have the ability to make special moments happen for consumers—through the marketing itself.

One similar example that I share in my book is that of De Beers and its “When Forever Began” event in New York City in December 2008. The brand created a romantic stage in Madison Square Park and offered kissing couples the chance to be photographed with a 360-degree camera. Instead of more staged actors and TV ad copy, this time De Beers enabled couples to experience and remember a very special moment together. The brand created real moments—through the marketing itself.

There are some downsides to both of these branded experiences. First, there were a few comments on the T-Mobile sing-along that suggested the enjoyment of the event was weakened by the fact that it was organized by and for a brand. This cheapened a special human experience for some people.

Another complaint could be that both programs are difficult to scale up to replace the millions of eyeballs that are lost when TV or print dollars are shifted to expensive events. After all, how many people were in London on April 30? How many Big Mac buyers will get to Piccadilly Circus this summer? There’s no easy answer to this complaint, but I believe such events can be very effective. First, they generate a significant amount of sharing through photos on personal networks—in effect breaking through the clutter with a trusted endorsement. The YouTube video above already has more than 200,000 views, and imagine the PR coverage that comes from taking over a global city like this. Second, I believe it can succeed by winning lifetime loyalty from a core group of consumers, rather than spreading interruption across millions of eyeballs and hoping some tiny percentage actually buys your brand (only because they were unconsciously seeded).

So here’s something to think about over the weekend: How is your marketing creating special, personal moments for your target consumers? Needless to say, 30 seconds of a canned message times a few million pairs of eyeballs won’t cut it.

Studies show that we see 3,000 ads per day – and growing. Some companies are discovering how meaningful marketing can be a break from the pressure to interrupt, and I enjoy telling their stories here. But others are determined to find new ways to break into our brains with novel interruptions. McDonald’s has followed the latter path again, this time by paying for drink placement on the morning news of a Fox affiliate in Las Vegas (KVVU).

In analyzing this move, let’s first get the meaning question out of the way. I see no way in which McDonald’s sponsorship of the show can be considered a value-add to KVVU’s viewers. The same program appears, the same number of commercials are run, but one more unavoidable ad is layered on top of the news broadcast. You could even call it an unavoidable “pop up” ad. It’s just another (very clever) interruption.

Not only is this sponsorship lacking in meaning, but I think it crosses a line. Those of us who have spent any time in the news business (The Duke Chronicle for me) know that there is a fairly clear separation between “church and state.” Now, I admit that the local morning news – especially the Fox variant – is not exactly considered the temple of journalism. But it isn’t Coke on American Idol – it’s still the news. And it’s unfair for the news anchors, who are basically giving a personal endorsement to an iced tea in order to keep their jobs – thus further weakening their self-respect as journalists.

I find it interesting that the Meredith Corporation owns this and several other local networks that allow product placement on their news programs. Interestingly, Meredith has built a network of advertising agencies and does some in-house creative work for advertisers in its magazines. Perhaps that’s part of why the line is blurrier there.

The New York Times also reports that the cups of McDonald’s will be taken down in the event that the news team has to report something negative about the McDonald’s Corporation:

If there were a story going up, let’s say, God forbid, about a McDonald’s food illness outbreak or something negative about McDonald’s, I would expect that the station would absolutely give us the opportunity to pull our product off set,” said Brent Williams, account supervisor at Karsh/Hagan, the advertising agency that arranged the deal between McDonald’s and KVVU.”

I can see how cool business logic could allow for smart people to invest in product placement on a TV morning show. It makes a ton of sense to plant the seed of McDonald’s breakfast items just as people are hitting the road and consciously or unconsciously thinking about breakfast. Heck, it might even be a huge ROI for the company. But my gut is that today’s viewers will be just as likely to start a boycott against McDonald’s as they are to start a new iced coffee habit. Is it surprising that the FCC is beginning a move to regulate product placement run amok?

McDonald’s should have learned its lesson from the negative PR and late night television jokes about its advertising on report cards in Florida elementary schools. I think there are many other ways that McDonald’s can use its marketing to add value to consumers’ lives. This would include anything from a coupon newsletter to furthering its terrific Ronald McDonald House program. Such interruption tactics weaken the brand image in our minds and do nothing for long-term equity or loyalty.  Not to mention the fact that they don’t help the cause when cities such as L.A. want to ban your restaurant completely.

While McDonald’s might enjoy a tiny boost in its multibillion-dollar bottom line as a result of this program, I think it’s another way that our industry is killing itself and, frankly, weakening society. As Auburn marketing professor, Herbert Jack Rotfeld says, “In the end, they just make the audiences even more skeptical of everything.”

(thanks to Umair Haque for the find)