iphone5

iPhone5’s implications for Advertisers

September 12, 2012 Apple announced the new iPhone5 which was widely leaked prior to the event. As many suspected the phone is thinner and longer which allows for a larger screen.  This larger screen has several implications for online advertisers. Outside of the screen several enhancements to the phone’s hardware and operating system also will impact advertisers.

Considering that Apple’s products contribute so much of the current mobile traffic, I think it is time Advertisers start to plan for these changes in their respective media plans.

Hardware changes that affect Advertisers:

  • Currently there is no mention of NFC or near field communications which Android phones have been pushing. This means that mobile banking might not become mainstream until next year.
  • The LTE web access which is relatively fast web access is going to increase consumption of information greatly. It will increase the number of web pages you access, the number of videos you watch and the number of apps you check for updates. All of this increases the number of impressions per micro-tasking session. For example if a person is standing in line at Starbucks, you used to just check Facebook, but now you might check Facebook, the weather, and the news.
  • The LTE web access will be so fast, that I can see more and more casual users getting rid of their laptops in favor or their phone and tablet. This clearly requires new ad formats and media plans that take into account more mobile inventory.
  • The larger screen creates black bars on the sides of older apps if they are not upgraded. This could be a new ad spot for something similar to a takeover unit that wraps around the app.
  • The larger screen is longer which has implications on the usability of the phone. People’s thumbs will not grow longer, which means the upper left corner of the screen is actually too hard to reach for most people. Once app developers realize this, they have two options, move the navigation controls to the bottom or make their apps in landscape mode for two handed use. Each of these scenarios potentially moves where ads can be placed in apps and the actual size of the ad unit. Being at the top of the page on a long phone may be the new “below the fold” unit. Just bad CTRs. Being near the navigation of the app will be key to higher CTRs.
  • Given the new physical format of the device, lots of accessory providers are going to be buying advertising this holiday season. There may be a minor bump in online ad competition due to this.  This also takes away spending money from other sectors.
  • Considering that Apple has been rather aggressive with Samsung in terms of patent lawsuits, you may actually see Samsung beef up their advertising of the Galaxy S3 to counter act Apple’s advertising. Once again pushing CPM rates up higher over the holiday season in the tech vertical.

Software changes that affect advertisers:

Apple’s new phone will ship with iOS6. For the most part this is Apple’s first big push to start to eliminate it’s dependence on Google products like Maps and YouTube. From what we have heard, YouTube will not be a default application on the iPhone. YouTube has already announced a native application for iOS6 to counter this. I suspect most people will download this on day one of owning the phone.

  • As Apple pushes out Google, this changes user behavior in terms of how they search and get other basic info. Most of which we used to get from Google. This potentially will reduce Google’s mobile search penetration on Apple devices and therefore lower AdWords revenue from Apple devices. If Siri gets your info via another service, you stop visiting Google Search.
  • The strike at YouTube actually gives advertisers more potential options of video advertising. I think you will start to see new ad units in the native YouTube app over the coming months. This will be an area of strong growth for Google in my opinion especially with the LTE web access.
  • The changes to the email in iOS6 allow you to mark people as VIP which sends them to a different inbox, similar to Google’s priority inbox feature. This potentially puts a major damper in email advertising on mobile phones. If your email ads are not being seen or open your ROI is going to be lower.
  • Given the faster web access, more and more people will be checking their emails on their phones. If for some reason they don’t use the VIP mailbox, and they open your email ad, you need to make sure your email renders properly. Having responsive email design will be paramount to ensure high CTRs.
  • PhotoStreams can now be subscribed to. This is huge for advertisers, especially fashion advertisers. Being able to subscribe to celebrities streams and I am assuming brands, you will see what photos they are taking, similar to Instagram or Facebook. If Advertisers play this well, you will get iPhone5 users to subscribe to your stream and push coupon images to them or pics of new menu items or new clothes in store. This will be a major way to drive traffic to your store and/or website. It will also put a major dent into Facebook, Instagram and Pinterest assuming there is no integration. If Facebook is smart, they will allow the iPhone to publish its photostreams directly to Facebook. As an advertiser it will be important to understand how photostreams work. You may find yourself buying a paid spot in Kim Kardashian’s photo stream sooner rather than later.
  • Passbook seems a bit like TripIt in that it keeps your tickets and travel info in one place. This feature has major potential to monetize geo-location ads. This is  if Apple opens that up. Right now it is more of a pipe dream.
  • Apple switching to its own maps interface, potentially reduces the importance of Google Places or business pages. The effect of this is still yet to be seen but for smaller local advertisers, I would keep asking my customers where they are finding my listing to see if there is a major shift in user behavior.
  • New apps means more consumer spending which means less expendable income for other purchases during the holiday season. In other words Apple will dominate your wallet in the coming months.

Some exciting changes coming up for the advertising world given the new iPhone. Stay tuned for more updates and please feel free to comment.