The Future of iAds : Is it Really a Premium Network?

About a month ago, Apple announced iAds  and when it was first launched there was a lot of speculation as to whether or not it would be the right tool to help media companies monetize their mobile applications. We wrote a blog post on it here stating that it probably was not the best solution for most media companies.

Apple is enforcing a lot of rules around the iAd platform. Firstly, they are controlling all of the inventory. If you want to run a house ad or retain your existing ad sales team to sell your inventory, you are probably out of luck. This would be a major change of strategy for a number of media companies who do indeed use ad networks at times, but usually sell their own advertising and then use networks to fill remnant inventory. Secondly, Apple is taking 40% of all the profits. I cannot think of a single media company that would be willing to give up 40% of all their advertising revenue to Apple.

Today, the Wall Street Journal unearthed some more information about iAds. They found out that Apple will charge upwards of $1 million for certain ad-buys.

To be among a select group of advertisers at launch could cost $10 million or more, the WSJ suggests.  Ad executives say they’re used to paying between $100,000 and $200,000 for similar mobile deals, but Apple is certainly putting a premium price on it’s so-called premium mobile advertising opportunities.

Apple is planning to charge advertisers a penny each time a consumer sees a banner ad, ad executives say.  When a user taps on the banner and the ad pops up, Apple will charge $2.  Under large ad buys, such as the $1 million package, costs would rack up to reach the $1 million mark with the various views and taps combined.

Our question is this, if media companies do not use iAds because it simply doesn’t provide them with the logical solution they need (inability to manage their own inventory and retain significant revenues), how is iAds a premium network? Why would big advertisers opt to spend $10M on a network buy that includes low quality financial apps or even worse fart apps?

I understand that Apple can target based on application category -i.e. Entertainment, but the only applications worth spending big advertising budgets on in that category are the ones developed by big media companies (MTV, CBS, etc). Those companies are using ad platforms that enable them to sell their own ad inventory and don’t take a massive 40% cut, leaving  applications to advertise on that are by no means ‘premium’.

Maybe we are missing something, but there seems to be a disconnect in the logic here. What do you think?

How News Organizations Need to Change in Order to Succeed : NAA MediaXChange Keynote with Rishad Tobaccowala

This morning at the NAA MediaXchange Rishad Tobaccowala gave a provocative keynote session on the future of marketing and advertising and how traditional media companies must leverage new platforms to more effectively serve advertising to customers.

As the Chief Innovation Officer of Chicago-based Publicis Group Media, Rishad is one of the most influential thinkers in the North American advertising industry. It is therefore no surprise that the audience was on the edge of their seats listening intently to Rishad`s advice.

We at Spreed found his talk very interesting considering many of his recommendations push newspapers in the direction of a number of the products and services that we provide (mobile platforms, mobile advertising, location based advertising, etc).

Rishad left with 10 recommendations for newspapers to follow in the future that we would like to share here:

1. Be schizophrenic – Only the schizophrenic will thrive. Run two or more business models at the same time but make sure they are very separate. Do not make a big mesh of all your models.
2. Embrace technology – Tech is the new magic. Make sure the follwing ive things are done by the end of this week.
   1. Use an RSS reader and start following your passions through it
   2. Get a Twitter account
   3. Get on Facebook
   4. Get on Foursquare
   5. Go to someone in your company who is younger (probably 2-3 levels below you) and make them your mentor. Take them outside of the company every two weeks and get them to teach you about what is new and upcoming
3. Embrace the blur – Church and state are too separate within news organizations. All elements of a news organization (sales, editorial, technology) need to work together in the same group.
4. Learn fast, iterate faster, make mistakes and don’t be afraid to fail.
5. Do a massive outreach to young people – You want to make the industry exciting. Don`t be swamped with old people. Get youngsters into the industry.
6. Think about what curating, combining and editing really is
7. Platforms – Every company needs a platform strategy. How do you attract new partners? What’s your device strategy (iPad, iPhone, etc)? What’s your search strategy?
8. Make sure that you celebrate the software and technology folks at your organization. Don’t hide them in a room somewhere even if they are strange. Tell them about the business and ask them to solve business issues
9. Think about  the future of your organization. Thank about your organizational design, incentives, benefits, etc.
10. This one was a bit odd and I am not sure exactly what he meant by it, but the industry is not anyone but you. there is not industry but yo, embrace the “muchness”. “This is my dream and I am going to decide how it ends”

Why iPad Adaptation is an Uphill Battle for Incumbent Publishers

A great post appeared on the O’Reilly Tools of Change for Publishing blog today by Andrew Savikas about the new Popular Science+ iPad application. He makes a great point and one that we have been advising a number of our clients to remember. When publishing on the iPad ensure that your content in dynamic and interactive. Do not just recreate your magazine or print edition on a smaller digital screen like a PDF viewer. This is a revolutionary new device so you are going to need to think out of the box; it’s not a black and white static Kindle or Sony E-Reader. Users expect interactivity and the ability to utilize many of the tricks and tools that we are used to on the (social) web today. Here is a link to his article:

Why iPad Adaptation is an Uphill Battle for Incumbent Publishers

Working hyperlinks are the very least we should expect from content like this on a device like the iPad, and they’re the bare minimum form of something notably absent in Popular Science+ — opportunity for engagement. No comment links, no way to see what the most popular content is, no way to email a picture or an article to someone else, no place to submit my own recommendations for better tools or to tweet about what I just read.

What are your favorite media apps on the iPad so far? Why are they so good? What do they do right? What distinguishes them from their print or web version? Let us know your thoughts.

iPhone OS 4 Event Review : Stats, Features and iAds

Apple, who are notorious for their big media events, made their official announcement of the iPhone/iPod Touch OS 4.0 features today. There are loads of new features to go through, but I will do my best highlighting the most important ones here.

Firstly some statistics:

• 300,000 iPad sold on first day of sales. 450,000 iPads sold as of today.
• iBooks: Users downloaded 250,000 iBooks in the first 24 hours. Users have now downloaded over 600,000.
• 1 million iPad apps downloaded in the first 24 hours. As of today they’ve downloaded over 3.5 million
• Users have downloaded over 4 billion apps through iTunes
• 185,000 apps in the App Store now
• Over 3,500 iPad apps in the App Store
• iPhone has 64% mobile browser usage. Everything else combined is just half the iPhone.
• Over 50 million iPhones have been sold.
• If you add iPod touches, over 85 million iPhones and iPod touches

Now for OS 4.0

• Developers can now access calendar, photo library, still and video camera data, quick look, SMS inside their apps.
  • This is great news as event modules can now add events into your actual calendar.
  • Articles can now be shared via SMS within the application without needing to leave the app
• Automated testing tool that Apple uses internally to decided whether an app will be accepted or rejected is now publicly available.
  • This means that the app approval process is much more open and it will speed up the overall approval process
• A few new features: Create playlists, 5x digital zoom in camera, Bluetooth keyboards, spell check, gift apps, Tap to focus video, Places in Photos, Home screen wallpaper, file & delete mail search results, web search from sugestions,Larger fonts for Mail, SMS & Alerts, Rotate photos, Sync IMAP notes, iPod out, Wake on wireless, Folders.
• Multitasking is here! Jobs likens it to cut, copy and paste. “Not the first, but the best.”
• Apps keep track of where you were and can start right back up again.
• iBookstore on iPhone as per our predictions in this blog post
• Better data protection. Encrypt all your e-mail, including attachments with PIN codes.
• Mobile device management. Letting IT managers to deploy iPhones and manage them remotely.
• Wireless app distribution. Companies can push out custom apps over the air instead of relying on an iTunes sync.
  • This is great for corporate apps as they no longer have to be distributed through iTunes

There is much more, but this is all they had time to highlight

iAds

iAd’s is Apple’s new advertising network. They will be managing all the inventory and from the sounds of it they will be taking 40%. All ad units are built in HTML5 and get served up in the application without having to go to an external site. Spreed is doing something very similar, but NO development skills are necessary.

• Jobs says Apple wants to help developers make money off their creations, but says that “most of this mobile advertising really sucks, and we thought we might be able to make some contributions.”

• Jobs says ads are easy on the desktop b/c of search. But people are spending all their time within apps. “This is where the opportunity to deliver advertising is,”

• Jobs: Average user is spending 30 minutes a day using apps. That’s 10 ads per device each day.
• We want to get 1 billion ad impressions per day by the end of the year.

• Jobs: deliver “interaction” and “emotion” – Something that’s in the middle of where Web ads are, and ads on your TV.

• Jobs said it was annoying for people to click on an in-app ad b/c it would take them out of whatever they were doing.
• Devs can add iAd in their apps for a 60% split of the revenues. All the sales and inventory are handled by Apple.
• Ads have access to much of the same APIs as apps, like location and some level of accelerometer access
• Jobs demoed a Toy Story and Nike ad
  • All the animations are interactive, and crazy smooth.
  • It’s not so much about the content of the app, but the interactivity
  • He’s flipping through the app: it’s offering up the history of nike ads, allowing you to flip through the years to see all the shoes throughout history
  • He pulls up the app with the Nike ad. It puls up an Air Jordan 2010 clip

So the run down on iAd’s is that it is great for developers in that it will be very easy to monetize apps. However, this is not a great solution for publishers and media companies. Apple will be taking 40% of all ad revenue and they are administering the inventory (you cannot retain your ad sales teams). In addition I am skeptical as to how deep their ability to target advertising will be. They have one piece of the puzzle and that is strong creative advertising, but they do not address targeting. Because they do not parse, control or index the content and because they do not understand user behavior, it will be hard to do deep targeting which is one of the main promises of mobile advertising.

Julie Ask of Forrester Research backs up my point about iAds not being for big publishers in her blog post on OS 4.0 with these two points

1. We didn’t hear a lot about targeting – making use of past purchase behavior, day-to-day use of applications, etc. We did hear about location. Knowing that I have downloaded and am using the latest Audi application or browsing automotive sites on my iPhone might indicated that I am in the market for a car – that would be valuable information to automotive OEM’s. Knowing that I buy alternative rock music or that I read mysteries adds other dimensions. Location – given the structure of how they sell ads – this will more likely be purchased by large, national companies with stores throughout the country. Location (from the consumer’s perspective) will be more interesting when it helps me find local mom and pop stores that better match my interests.
2. We didn’t hear much on analytics for the advertisers. This will be interesting to watch as the more effective Apple can be in demonstrating ROI – bought movie tickets, purchased a Nike shirt, bought the movie Toy Story – the more advertisers will spend. They’ll spend on branding now, but I think they’ll spend more if they can drive sales.

What is good though is that it will super charge the agencies to begin selling ads as they can utilize their existing skills sets to build strong creatives. Jobs just did to the mobile ad industry what he did to the mobile industry in general 2 years ago.

Mobilizing Retail : If it's Important to Retail Advertisers, it's Important to Publishers

Retail advertising is the engine of newspaper revenue.  Of the $13,356.2 billion spend on national and retail advertising in Q’3 2009, 77% came from retail.    As retailers and newspapers continue to test new ways to engage shoppers, flyers are and will remain an connection bewteen retailers and their customers.

According to Matthew Tilley, COO of Inmar quoted in the January 26th edition of Internet Retailer “newspaper inserts still account for 89% of coupons distributed to consumers and more than half of coupon redemption” .  Tilley also points out that consumer coupon redemption grew by 27% between 2008 and 2009.

As mobile publishers, we are aware of the increasing importance consumers place on their smarphones as a source of price intelligence.  A recent study from Compete demonstrates how smartphone users in general, iPhone users in particlular, have made mobile device an essential part of their shopping activity.

Mobile users are now able to access retail price information on their smartphones because of  the increase in the number of retailers that have mobilized their weekly inserts/circulars.  Virtually every major American retailer now distributes their weekly Free Standing Inserts (FSI’s) on mobile devises.  Retailers continue to expand their use of mobile to engage their consumers and to distribute feature pricing information and mobile coupons.  Retailers as diverse as Armani and A&P have add mobility to their marketing communications activity.  Very recent examples of the expanding role mobile plays in retailer’s  include Valpak’s mobilization of the 17,000 coupons in their vehicle.  Verizon has made their SpendSmart digital coupon product available to their mobile sunscribers.  Safeway has joined Cellfire to allow loyalty club members to download coupons to their mobile.

The mobilization of retail flyers/ circulars and coupons respond to a very clear demand from consumers for mobile price intelligence.

We believe that we are still in the early stages of the mobilization of retail. As more consumers purchase smart phones we will see a dramatic increase in their reliance on their mobile phones for price intelligence and product discovery. Retailers will need to respond to consumer demand for price intelligence with applications of their own and with smart ad placements across mobile applications. Spreed has been following this development – we know that it is vitally important to our newspaper publishing partners because inserts deliver significant ad revenue.  We have built FSI capability into  our mobile application platform.  We call this solution mFlyers.  It has been built to allow publishers to easily sell retail based insert space in their mobile applications. We we will be showing off this functionality very shortly in our blog and on our applications. Keep your eyes peeled for more information soon.

The iPad Frenzy

So it’s official, we had a chance to play with the iPad this morning and it is without a doubt a game changer. Whether more articles are read on this device or on mobile phones is yet to be seen, however the look and feel of a newspaper on its brilliant high resolution screen is something that is easy to fall in love with. Spreed will undoubtedly be releasing a very slick iPad news reader in the very near future so keep your eyes peeled and please give us any suggestions you may have on how to make the best news application possible. We have some great ideas, but want as much feedback and input as possible. So what are the important statistics?

• In just one day the iPad sold 600k-700k (300k in store and the rest were pre-orders)
• 1 Million apps downloaded
• 22% of new apps being built are for the iPad
• 2000 iPad apps are already available
• Unilever, Toyota Motor, Korean Air and Fidelity all have booked ad space on the NYTimes iPad app
• Advertisements on print publishers’ applications cost $75,000 to $300,000 for a few months with some exclusivity

This is a very exciting new platform and more than ever I urge digital strategists at publishing companies to think outside of the box and not recreate what they have done on the web. I usually do not do this, but here is an re-post from an Ad-Age article on which media companies are already developing apps for the iPad and what these apps look like. I love the ABC app. Here is a link to the original article.

ABC

The ABC Player for the iPad is starting off with free, ad-supported episodes from approximately 20 series, including “Lost,” “Grey’s Anatomy,” “Modern Family” and “Desperate Housewives.”

CBS
CBS is offering streaming video clips from a variety of shows as well as full episodes of “Survivor” and technology content from CNET.com. Full-length CBS programs are available for purchase via iTunes and viewing on iPad.

CBS Radio
CBS Interactive Music Group is launching a free iPad app for Radio.com that will feature live streams from more than 550 music stations and over three dozen news, talk and sports stations from CBS Radio’s network and streaming partners such as Yahoo Music. CBS will use Last.fm’s “scrobbling” technology to send music recommendations to users and share what songs friends are listening to.

Clear Channel
The radio company’s iheartradio app will launch a free iPad version of its existing iPhone app this weekend, but is expected to roll out a custom app later this year with better tailored opportunities for advertisers and local station activation.

Conde Nast
Wired’s iPad edition is under development and Vanity Fair, Glamour and The New Yorker are expected this year too, but Conde Nast is kicking off on the iPad with its GQ app, which the iTunes store says was “developed for both iPhone and iPad” but now includes optimization for the iPad. Each issue of the GQ app edition costs $2.99.

Discovery Communications
Discovery is bringing its “MythBusters” franchise to the iPad with a $4.99 app comprised of behind-the-scenes clips, outtakes from the show and three multi-level games in which users can compete against each other.

ESPN

ESPN is launching two free apps, “ESPN Pinball” and “ScoreCenter XL,” customized for the iPad. “Pinball” is an arcade-like gaming app featuring voiceover commentary from “SportsCenter” host Jay Harris, while “ScoreCenter” is an adaptation of the successful iPhone app featuring real-time score updates and play-by-play recaps.

Men’s Health
Rodale, the publisher of Men’s Health, is offering Men’s Health as an iPad edition for $4.99 an issue but is making 10-page previews free to consumers. Each issue will include all the editorial content of the print edition plus extras such as video. Procter & Gamble’s Gillette brand secured sponsorship of the April and May issues of the Men’s Health iPad edition by increasing its other ad spending with Men’s Health.

MTV Networks

There are “co-viewing” apps, meant for use while watching shows, under development, but MTV Networks is starting out on the iPad with offerings such as its $4.99 Beavis and Butthead app, which includes video clips and games, and the $2.99 app VH1 Classic Presents: Intellivision Games for iPad.

National Public Radio
NPR has introduced not just an app but a new website optimized for the iPad. The free app is meant to highlight news, arts, lifestyle and music content in a “magazine-style” presentation. Both the app and site load audio players built specifically for the iPad.

The New York Times
The New York Times’ “Editors’ Choice” app is offering a selection of news, opinion and features, available free to consumers and relying on advertiser support. The Chase Sapphire card is sponsoring the app at the start.

Popular Science

Popular Science is the first iPad app from Swedish publishing house Bonnier. The science magazine app was developed on the publisher’s Mag Plus platform, which will be used to get its titles on the iPad soon. The app will feature content from the magazine’s April issue and touts flow navigation “more like a panning camera than a flipping page.” Future issues will sync with the print publishing schedule and will be on sale within the app.

Time
The Time iPad app will include all the magazine’s weekly content plus additional slide shows and video, costing consumers $4.99 per issue. Initial advertisers include Fidelity, Korean Air, Liberty Mutual, Lexus, Toyota and Unilever. “We’re proud of Time on the iPad and of the special features that will be in it, such as extra pictures, videos and a news feed featuring the latest stories from Time.com,” managing editor Rick Stengel wrote in his editors’ letter for the April 12 issue. “We were a little handicapped in part because, unlike some other news organizations, we were not been working with an actual iPad. It is the beginning, not the end, of the process, and we hope to evolve and change every week.”

USA Today
USA Today’s app will include much of the editorial content from each morning’s paper and will update around the clock. It’s free to consumers for the next three months, courtesy of a sponsorship from Courtyard by Marriott, but will require a paid subscription after that. USA Today has not yet set the subscription price.

Walt Disney
Disney is offering two read-along “Toy Story” apps from Disney Publishing Worldwide, one free and the other available at $8.99 with a year-long subscription to disneydigitalbooks.com; iPad videos from Disney movies and Disney Channel TV shows from Disney.com; three-page previews of more than 500 Marvel comic books with the option to purchase each selection in total; and more.

The Wall Street Journal
The Wall Street Journal for iPad is a free download with some free content, but complete access will require a subscription that runs $3.99 per week. The subscription will include news throughout the day, top picks from editors and access to the last seven days’ worth of print content. Initial advertisers include Buick, Capital One, Coca-Cola, iShares, FedEx and Oracle, with full-screen ad units that appear between article and section pages.

The Weather Channel
One of the top apps for iPhone and Blackberry, the Weather Channel comes to the iPad with expanded custom weather forecasts, full-length videos of Weather Channel programming, interactive maps, weather alerts and other features. The free app is sponsored by Toyota.

YouTube
It’s not just traditional media companies, of course, gunning for the iPad’s early adopters: YouTube, for example, has introduced afree iPad app tailored for the new device.