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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.

 

 

 

SXSW Thoughts 2012

SXSW is still going on in Austin at the moment but the EDU and Interactive conferences are officially done.

How was SXSW? Massive. The conference literally is a city by itself. Multiple venues, 20-30 sessions per hour and thousands of parties. Over 250k people will come to Austin for SXSW this year. That is over 30% of the normal population of Austin.

I thought it might be good to summarize what SXSW Interactive really talked about.

Major outcomes/themes of SXSW 2012.

  • Healthcare is the new social. The government is eager to clean the mess we call our healthcare system. The open health data initiative (http://www.data.gov/health) is key to this. Lots of money will flow to this tech sector since there are healthcare companies with deep pockets to buy it.  Simple projects like iTriage.com provide massive value to companies like Aetna.
  • costo voltaren fiale 4 mg Education needs reform. In the short term the attention will flow to social teaching platforms but there is little money to be made in this sector without the help of student loans. I suspect reform in this sector will be hampered by revenue model issues. The tech folks that focus on creating solutions for the K-12 public school sector will see the most traction in the near term.
  • Social is a bubble. Very few if any social apps or sites have any revenue. It is inevitable to have these sites collapse unless they embrace something like advertising. Most of the apps at the show were features of another site like Facebook. Few if any had original technology that didn’t depend on the Twitter API, Google Maps API or Facebook API.
  • The 2012 election will be decided on social. Focus on transparency, fact checking and online donations will drive the new candidate.
  • TV is not going anywhere.  Former Vice President Al Gore said no current technology rivals the richness of TV in terms of content. The goal is not to replace TV but converge with it. TV based social apps will drive much higher advertising rates in the near future.
  • Google may not be the winner in social but they still command a large amount of your daily internet time. Fragmentation between Google+ and Facebook is not helping the consumer.
  • Android still doesn’t get any love. Developers are still choosing to launch apps on iOS first. This was really shocking to see considering the Android phone penetration. Nokia and Blackberry have been thrown to the side of the road. They are no longer relevant.
  • Mobile Marketing is still in its infancy. Mobile ad formats are inadequate and there is a large lack of understanding of how mobile advertising currently works.
  • Near Field Payments or NFCwill become mainstream at the end of this year. Companies like ISIS and Google Wallet will lead the way. This will be a massive change to the US Economy over the next 18-24 months. If IPhone 5 has NFC in it, it will solidify the concept and push it mainstream. Almost all Android phones will have it by years end.
  • Privacy will be a renewed movement. People’s social profiles have gone out of control. Many people expressed concerns about not sharing pics of kids and family on Facebook anymore. Newer more secure platforms will start to gain traction. Try out burst.it for example. Apps like Highlight are overly socia in my opinion.
  • Portals are returning. Sites like Pinterest.com, Pixable.com etc are just a re-skinned form of Yahoo.com. Curation of the internet is necessary. None of these sites have any way of automatically filtering for you, they are all socially sourced. People are throwing tons of money at these ideas. Welcome to 1999 again.
  • US interactive business models don’t always translate to other economies. But the bigger ideas are easy to copy and implement locally. Think Ren Ren, Yandex, Baidu etc.
  • eBooks are coming of age. The iPad, Kindle and Nook are going to create a whole new type of book, newspaper and magazine experience that really shows what HTML 5 can do.
  • Event Planning apps were a big deal. Apps like Schemer and Glomper made some traction.
  • Apps became creepy. Apps like Ban.jo and Highlight know, display and share everything about you.

Overall, SXSW was a really enjoyable event. It is hard to digest but if you pick off the things that interest you the most, you can really get a lot out of it. The US economy is for a massive change this year.  Keys to having any of these predictions/statements come true will be dependent on the 2012 Presidential election.