Pundits have predicted that Apple’s iPad will be a revolutionary gadget, transforming everything from print media to environmentally friendly transportation to computing at large. But I’m beginning to think that Apple’s ridiculously hyped new tablet may have more impact on mobile marketing than any other segment.
For years, mobile marketing has been on the cusp of a breakthrough, according to industry analysts, but the space has been held back by a host of problems, including the small screen sizes of mobile phones and a general lack of traffic on the wireless web. The industry is beginning to get legs, though, thanks largely to the emergence of the iPhone, Droid and other high-end devices that not only spur traffic on the mobile web but are also fueling the consumption of mobile applications. And the app craze has given birth to in-app ads, which have quickly become a key underpinning of the overall mobile marketing industry.
Apple is positioned to give that space a huge boost with iAd, a platform and network that will deliver come-ons to users on the iPhone, iPod touch and iPad via the upcoming iPhone OS 4. The Wall Street Journal reported last week that Apple will charge advertisers an exorbitant $1 million or so to deliver ads to the mobile devices, and may demand as much as $10 million for marketers eager to be a part of iAd’s launch. The company will deduct a penny from the $1 million charge every time a user is exposed to a banner ad within an app, and $2 every time a user clicks on the ad. Apple insists on building the ads itself initially, to ensure they are functional and attractive, and will make a developer kit for agencies to create pitches in iAd. The ads will appear on the iPhone and iPod touch beginning in June and will expand to the iPad later this year.
The high price tag is sure to keep some advertisers at bay, as will Apple’s insistence on controlling how ads are created. And it’s worth noting that the iPhone’s share of the overall handset market in the fourth quarter of 2009 was just three percent, according to Strategy Analytics. So iAd advertisers will have to dig deep to reach just a fraction of the overall mobile market.
The iPad audience, of course, is currently far smaller than the number of iPhone users. But iPad users are voracious consumers of applications, as evidenced by the 3.5 million apps that were downloaded to the iPad in the first weekend alone. Those numbers are sure to swell as Apple churns out more iPads and as the App Store expands its library.
Additionally, advertisers willing to shell out the cash to be a part of iAd are sure to invest heavily to create the kinds of ads that will grab users’ attention. While the tiny screens and limited controls of mobile phones continue to shackle advertisers looking to target on-the-go users, iPad’s full-sized touchscreen invites the kind of creative, innovative campaigns ad agencies dream of. Campaigns can deliver eye-catching videos and encourage users to comfortably interact with their fingers. An automaker could put users behind the wheel of its latest sports car, for instance, letting them take it for a virtual spin. A shopping mall could give virtual tours. And because iPads will be connected via Wi-Fi more often than cellular networks, advertisers can deliver content without the latency that often plagues mobile data transmissions.
That kind of functionality will allow creative types to develop all sort of innovative mobile ad campaigns. And those efforts will trickle down to smartphones and other mobile devices as advertisers tweak them to compensate for the shortcomings of smaller gadgets. So while advertisers may not be able to fully duplicate their iPad campaigns on traditional handsets, Apple’s new tablet will have a major ripple effect throughout the still-emerging world of mobile marketing.