iPhone Ads

Old Dog, New Trick. Apple iAds.

Most of us have probably seen the recent Apple iPhone  4.0 presentation given by Steve Jobs. This presentation included a few minutes on their planned new iAds platform for the iPhone and iPad. (you can watch it here, and iAds start around 44:00 minutes).

Now, this is a pretty cool thing for everyone involved in an industry that wants to make ad money (marketers, developers, agencies) but, I have a few things that come to mind.

Question one: Do current conventional online ads really deliver no emotional experience, and isn’t fairly plausible that iPhone ads will have the same problems with things like click through and retention?

First off I am going to disagree with somethings Steve Jobs said. (big surprise here since he has been on this fan-boys shit list since the iPhone 4.0 key note. See my post on Flash from earlier.)

Contrary to what Steve says, I think there have been many examples of online ads that have  an emotional ad experiences, and a compelling reason to click through and find more. The real question here is, are they all relevant in the end user’s context? I don’t care who you are, or what medium you are using, people hate being interrupted in what they are doing with ads, but when they go to an online portal it seems accentuated. So how will this be that much different on an iPhone?

I agree with the Apple folks that click-throughs will improve.  This will happen because now you have a seamless transition between the application to ad and back to application. Let’s not muddy the waters here though: In reality this is just fixing a problem mobile apps have while online portals really don’t. You can easily go back to the portal/website from an advertisement. In the end, our human behavior of hating to be interrupted by advertising will probably stay the same. Now, even though you will have your iPhone/iPad with you almost all the time, and even though it’s location aware it’s not like iAds and the examples Steve Jobs showed are that much more interactive or interesting than anything you have seen on a Microsite in the last ten years. Development of a compelling action is solely a function of how creative the brand or their agency wants to make their application, or in last ten years, a microsite experience.

I think Steve Jobs just played the “it’s more emotional” card to make iAds look more interesting to brand managers, who are driven by the notion that Advertising has to be more emotional and creative. In addition, Steve Jobs is attaching this promise an amazing track record for creating new platforms for those brands. And this is something no brand manager can say no to, especially because there so much frustration in the online marketing community with online metrics and really understanding what to do. So, if Apple can make their community happy through delivery of a simple to use platform,  it will make a lot of money.

Question two: Do people really ignore “search” on their iPhone when they really want to find something?

Without a doubt, when you have a content and subject issue that is covered by one of your applications, you are going to use that app to search for a result. No matter what that app is. Now ask yourself and be honest, how many application do you have on your iPhone that you rarely, or never use? On mine, it’s about 75 percent. In reality it goes like this, at the end of the day you love the idea of what the application is, and you downloaded it, but you haven’t made it a part of your daily experience. So at the end of the day, the iAds works well for the apps you use on a regular basis, but on many applications getting people to connect with your branded content is still just advertising. the same type you click “Igonre” or “Skip”, in traditional online browsing experiences.

So I’m not really sure how that argument even helps with Apple’s case. I doubt people who search things in a topic area that is not embedded  directly in their daily lifestyle will first try to find an application that matches their need in the App store, then make the decision to purchase, and then go on to evaluate the application and use it to search on a regular basis.

And let’s be honest here: in the end aren’t many of the iPhone applications we use just like web portals, and iAds are just like embedded online advertising in these sites? Think about it. When you go to your few favorite news, sports, and topic of interest site, in many ways is like your favorite often used apps on the iPhone. As for the Ads well, there are ads that try to interrupt on those sites you go to, and now they will be everywhere on your iPhone. In many ways this is brilliant. Especially when you think about the size of the overall iPhone user base. And when you think about it, advertising has paid the livelihood of all mediums so far:  print, radio, tv, and websites. I guarantee that in the future it will pay for application development as well.

The difference is that this media channel is owned only by Apple, and the channel is owned by Apple. In addition the delivery and distribution platform is owned by Apple, and guess what? The media agency is also Apple. To that I say well done Apple.

Now for question number three: Say What… Only 60% revenue goes to the application owner?

In many ways this is like paying for product placement in a grocery store. Just like Coke pays Safeway for premium shelf space to display its products. Think about this, you are paying Apple 40% to advertise your product, and Apple is only giving you the platform to advertise on. You still have to do all the leg work you still do the strategy, the creative and program  the interactive ad. Wowza, When you figure in your development costs your ROI is slipping even further.

Now I admit that right now iPhones users still represent are very interesting and affluent target audience. But still, 40% percent? That’s huge.  If anyone can pull this off, it’s Apple. It will be interesting to see how all of this shakes out for Apple in the end.

In the end it’s an old dog with new tricks, where the new trick is a single platform business and license to print money. Apple, and Genius.