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March 2010

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Can the iPad Save the Advertising Industry?

by Glen Emerson Morris
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One of the big questions surrounding the iPad is whether it will do for the publishing industry what the iPod/iTunes combination did for the music industry. The quick answer is probably, but keep in mind the fact that the iPod didn't save the music industry as much as radically change it. In terms of sales, the iPod unquestionably helped. However, it also profoundly affected the balance of power of those within it; musicians, music companies and consumers.

A better question is whether the iPad can save the advertising industry, and the answer is that it probably will. With the iPad revolution, the change in the balance of power this time is between advertisers, publishers and consumers. Even at this point, it seems likely the biggest winners will be advertisers, and for several reasons.

A whole new ballgame
The iPad is the first e-reader to offer a full color display and a screen close in size to the standard magazine page size. This by itself is major milestone, but when combined with the Apple online iTunes store business model, it becomes a game changing innovation. Add the potential the iPad has to link to ad servers to offer ads customized for the individual reader, and you have a full blown technological revolution.

The iPad format revolution
One of the key aspects of the iPad is that it will allow advertisers to use their existing standard size marketing material, drastically reducing the cost of launching an iPad based campaign. Until now, any advertiser wanting to reach consumers on the move had to contend with a very small screen size and a variety of layouts with which to display their advertising and catalogs. This not only limited the effectiveness of the advertising, it also added the additional cost of creating or modifying existing material to fit an assortment of screen sizes and layouts. The iPad changes the entire layout cost equation in advertisers favor.

Expect a new diversity of magazines
When the Apple iBookstore goes live we can expect to see a wide variety of new magazines, some on topics we never considered likely, or even possible. Advertisers will be able to target many consumers groups not economically reachable now.

The expected increase in variety will be similar to the increase that resulted from desktop publishing 25 years ago. Before DTP came along typesetting a single page could run $50. This could add up to well over $2,000 for a 48 page magazine, an amount equal to the cost of printing a limited edition of the magazine. When typesetting became commodity priced it made a lot of publications economically viable that weren't viable before. The same will happen due to the iPad eliminating the cost of printing from the equation.

The catalog revolution
With its large color display, the iPad will be a great way to distribute catalogs in Acrobat PDF format. Companies have been doing this for years, but the catch is that consumers had to be in front of their computer to use the catalog. The iPad's main attraction is its portability. Anywhere you could read a printed catalog, in your bed, on your sofa, on the commuter train, you can read an iPad. It's not too hard to imagine the Apple iBook store having a section just dedicated to catalogs.

Mixed news for publishers
While advertisers may benefit from the iPad, the iPad is definitely a mixed blessing for the publishing industry. The iPad will offer publishers a new distribution channel for full color publications, at the same cost as black and white, offering unprecedented time and money savings. However, those same qualities will act to lower the cost of entering the publishing industry, significantly increasing the competition. An increase in the number of advertising supported magazines will likely have a downward pressure of ad rates, something our industry really needs at this time.

Good news for consumers
While Apple is positioning the iPad as a multipurpose product, capable of running many different types of programs, it's likely most early purchasers will buy it for its e-book capability. Even avid Kindle readers will find the iPad color and greater screen size hard to resist.

Unlike the Kindle, with the right software the iPad should be able to display many off the shelf magazine collections currently available in DVD, like National Geographic, The New Yorker, or even Mad magazine. However, new collections of magazines might go even further by offering interactive ads tailored to the reader.

Future iPad ad server capabilities
It's only a matter of time before someone develops a content publishing system that will allow customized ads embedded in iPad books and magazines. Even if Apple isn't working on this, which is a very big if, chances are other people are working on it, and that it will be available soon. With the Kindle, it was a moot point because the relatively small B/W display of the Kindle is not really suited for more than the most basic ads.

The virtual book of the future
The iPad will just be the first of a class of products that combine the format of a magazine with the ability to be electronically updated and the ability to present ads targeting the current reader. Interactive books are on the way, and so are interactive catalogs, and just in time.

With the radio audience lost to iPods, newspapers dying by the dozen, and TV markets eroding faster than Toyota's reputation for quality, advertisers need a new way to reach consumers. The iPad just might fill the bill. The iPad can provide the sound of radio, the visuals of TV, the text of newspapers and the vast resources of the Internet, in one portable device that's as easy to use as a Mac. It's hard to imagine the advertising industry having a better tool. Now, we just have to learn how to use it.


Glen Emerson Morris was recently a senior QA Consultant for SAP working on a new product to help automate compliance with the Sarbanes-Oxley law, an attempt to make large corporations at least somewhat accountable to stockholders and the law. He has worked as a technology consultant for Yahoo!, Ariba, WebMD, Inktomi, Adobe, Apple and Radius.





Copyright © 1994 - 2009 by Glen Emerson Morris All Rights Reserved


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