Tag Archives: apple

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?

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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.

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The iPad is Coming: Are You Ready?

Well it’s only a few days away and the anticipation is certainly building up. The iPad will be available in stores April 3rd, but consumers are not the only ones who are investing money into this revolutionary new device. As we already know The New York Times is launching an iPad application that will be available when the new device hits the shelves.

The New York based national newspaper is already seeing return on their investment as advertisers from all sorts of industries begin buying up inventory. It has been reported by multiple sources that big-name advertisers have already bought ad space on the NYTime iPad app. Unilever, Toyota Motor, Korean Air and Fidelity have booked space on the New York Times’s iPad application, and Chase Sapphire already purchased all of their advertising units for two months.

iPad advertisements on print publishers’ applications cost $75,000 to $300,000 for a few months with some exclusivity, Phuc Truong, managing director of Havas Digital’s Mobext US, told the NY Times. Early excitement is due, in a large part, to tapping into the Apple buzz, which includes having advertisements show up in all Apple in-store demos of the product. Time is charging $200,000 for a single spot in its first eight issues designed for the iPad. The Wall Street Journal has four-month deals with several companies that cost $400,000.

These are by no means numbers to ignore. Spreed has been contacted by a number of our publishing and media partners to develop iPad apps for them and we are working very closely with a number of them to design what we think will be a best of breed solution. The iPad has unique capabilities and design opportunities that we are very excited to be working with. Please let us know if you need any help building or monetizing your iPad applications.

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Apple and Newspapers Can Co-Exist

This is a guest post from Kirk LaPointe, the Managing Editor of the Vancouver Sun, blogger at themediamanager.com and adjunct professor at the UBC School of Journalism.

The routinely strong Seeking Alpha site features a somewhat conciliatory post from media corporate financial advisor on the impending coexistence of the Apple iPad and the newspaper industry.

Dan Ramsden has some tough words for Google. He sees its recent encouragement of the newspaper industry to experiment as self-serving — the more papers try to do things online, the more Google’s search engine technology benefits.

But he makes an interesting choice in where to place the technological bet. While recent media coverage has suggested Google’s open-source design of its Android smartphone offers the greatest opportunity for old media to succeed, Ramsden begs to differ.

He is firmly in the Apple camp. It’s the technology of choice by consumers, it’s the technology company that has figured out (through iTunes and the iPhone) how to exact a premium for content, so it’s the technology the newspaper business should focus on serving.

“Newspaper and magazine owners, who are struggling to redefine their business models for a new online and mobile environment, would probably be well served to align themselves with the platform that can offer a revenue model, and a mobile marketplace, and leave the experimentation and iteration stuff to young entrepreneurs and startups that do not yet have a franchise to protect,” he writes.

He suggests: “Style, design, quality control, are all characteristics that will do much more to facilitate the popularity of paid content than one more colorful website that may or may not show up at the top of Google’s search results.”

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Mobile Newspaper Apps Deliver Young Readers

“A new survey by the Pew Research Center released Monday found more than a quarter of all American adults read news on their mobile.” –Pew research

This headline from the March 3rd edition of MobileMarketing Daily caught our attention.  The headline is taken from the recently release Understanding The Participatory Newspaper Consumer which is a deep analysis of the publishing ecosystem.  From our perspective as a mobile publishing company the most encouraging news for publishers is the degree to which younger readers – the readers newspaper publisher need to bring into their franchise – are using their mobile devices to access news and information where and when they want.   This table taken from the study confirms  that younger adults are much more likely to access news and information on their mobile than older adults – 43% adults under 50 expect to find  at least some of news and information that they need on their mobiles.



We are not surprised by the importance of mobile as a trusted source of news and information for younger adults.  The iPhone apps we have built for our publishing clients continue to drive double digit growth in new subscribers and page views.  As important, app publishers are experiencing month over month growth in average number of articles read.  This tells us that  iPhone app subscribers  have quickly adapted newspapers to fit their reading habits – they no longer need to be in front of the paper or online editions to access the news they want when they want it  We expect to continued growth in on demand newspaper as more and more adults move to app enabled phones.

We remind our publishing clients that Apple app editions deliver a young readership – almost half of whom are under the age of 34 according to AdMob research.– and  that these apps are the pipeline to their future franchise.

When most of us think of Apple app editions, we usually think of the iPhone as the most likely delivery device.    But as Flurry research shows, the iTouch now delivers 41% of all Apple app user  sessions

AdMob data above  clearly demonstrates that the iTouch user profile is very different from the iPhone user profile – three quarters of iTouch users are below the age of 18 vv 15% of iPhone users.  We believe that the iTouch cohort is of vital importance to publishers for two reasons.

1)      Because they can and do access the App Store just as easily as iPhone users, they are a captive audience for news and information relevant to them

2)      They are now locked in to satisfying their information and entertainment needs with proprietary Apple hardware and software.  As they mature, the migration to the iPhone and iPad will be a natural and seamless progression for them.

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Congratulations to the Guardian

The UK’s Guardian is one of the most innovative newspapers in the world when it comes to digital media. About two months ago they launched their iPhone app which costs $3.99 in the iTunes app store. In only two months they have broken the 100,000 download mark which means they have made a staggering $400,000 – 30% that goes to Apple.

This is great news and something newspaper publishers around the world should be paying attention to. Not only does it prove that consumers want to read their news through native mobile applications, but it also proves that they are willing to pay for this privilege.

A big round of applause go to the entire Guardian Digital Team for their pioneering work in the mobile media ecosystem. Congrats!

Download the app here

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Apple Banning Location Based Advertising? – We Don't Think So

We recently reported that Apple acquired Quattro, a mobile advertising network. Shortly after the sale of Quattro Apple released a statement saying that apps that requested a users location for the primary purpose of location based advertising would be rejected by the app store.

At first sight this appears to be anti-competitive behavior. Apple recently filed for a patent around location based advertising and their purchase of Quattro makes it obvious that they plan on pursuing this highly engaging targeting method. Over the past week every has been yelling that Apple is the new Microsoft and that their actions are anti-competitive in nature. I do not think we should be so quick to judge.

By the sounds of it, Apple is not going to ban applications that use location information for advertising as long as they provide some other added value, location based service. Only time will tell, but it seems far fetched to think that they would allow apps that use Quattro’s platform to perform location based advertising without a valuable reason to grab the location and not others. What they are trying to do is ensure that people do not get slammed with location requests for no other reason than to be bombarded with advertising.

If this is what Apple is doing, I am behind them 100%. Location based advertising has always been considered the holy grail of the mobile platform, but there is a fine balance between adding value and being annoying. Apple is trying to ensure that their user experience is not compromised by annoyances to the user that don’t actually give them anything useful in return.

For media publishers adding valuable location based content should not be a problem. For example, in order to gain the users location all the publisher needs to do is provide local news, local weather, or local reviews. If you add this type of functionality then you have every reason to grab the users location as you are giving them something in return for their coordinates and can therefore also use that location data for ad targeting.

If this is the case then good on Apple for trying to maintain a high level of user satisfaction. Here at Spreed we will be keeping our eyes on this issue as we currently allow publishers to target users with local advertising, but only do so if we have a good reason to request their location. Only time will tell.

Update:

Here is the official statement from Apple:

If you build your application with features based on a user’s location, make sure these features provide beneficial information. If your app uses location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user’s location, your app will be returned to you by the App Store Review Team for modification before it can be posted to the App Store.

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