Posts Tagged ‘iPad’

Early iPad Impressions: Not an “Ad” Medium

Tuesday, June 15th, 2010

A little more than a week ago I purchased an iPad. Typically I am an early adopter for tech toys such as this for a few reasons: First, in my job as strategy leader of a digital agency, my team and clients are eager to hear our take. Second, I am always looking for tools that will help me be more effective and/or efficient in what I do for a living. In this case I have been increasingly feeling the limitations of my laptop, especially when I want to, say, show a few slides or websites to a client over breakfast or lunch; the last thing you want to do in those situations is haul a heavy bag around and wait 10 minutes for the thing to power up and down. But I was really most interested in purchasing an iPad to understand for myself whether this promising/hyped new category of devices would be dominated by the old, interruptive model of advertising or start with a platform for Marketing with Meaning. And after a few days of use I can safely include that the latter is the case.

So far, the interruptive model for iPad advertising seems to be moving quickly up the hype cycle. Some people actually believe that this will—finally!—be the year of mobile advertising, even before Apple got into the game. Apple is preparing to launch its own advertising network for iPhone and iPad apps with special creative formats, dubbed iAd. It has raked in $60 million in commitments already from some of the biggest brands in the world who want to test it first, including Unilever, AT&T, Sears, State Farm, and Disney. The hope is that millions of app developers will earn a living out of turning a percentage of their mobile pixel space over to new ad networks and wait for the money to roll in—and marketers can reach people closer to where and when they actually pull out their wallets to buy stuff.

But a few of us are warning that mobile advertising is not necessarily the next big thing. Along with many others elsewhere, I wrote in this blog back in May about the limitations of iAd as an advertising option. The Wall Street Journal blog recently featured an interesting quote from Kevin Ryan, former CEO of online-ad company DoubleClick: “The answer that people want to hear is that mobile is going to be huge.” “The People” obviously means investors who hope to sell their mobile-ad companies to the highest bidder. But it also includes the largest advertisers in the world—who are watching TV commercial ratings and print subscriptions sink and know that they need to figure out a mobile solution quickly.

The central challenge, however, is the lack of “scale” in mobile marketing. At the end of the day, traditional advertisers such as the big names above depend on an interruptive model in which many millions of eyeballs are exposed to a short message in hopes that some small percentage leads to a sale. Just because they long for this scale does not mean it will actually arrive. There are already too many ad impressions to compete with, too many media options for consumers, and too many mobile-phone platforms to allow for such scale.

The alternative choice for mobile—and advertising overall—is Marketing with Meaning. In mobile devices this looks like creating value-added apps that a smaller percentage of people download (as compared to mass interruptions), but because the brand engagement is so much superior, this small group buys products and services at a much higher rate, over a much longer time period. This is the bet being placed by brands as diverse as Charmin (public restroom finder), Nationwide (car accident guide), Starwood (loyalty points tracker), and REI (ski report). The Gilt Groupe, a high-end online retailer, is now seeing 10% of its sales come from the iPhone and iPad. The reason? A killer interface made specifically for these platforms, and a business that has great deals for a limited-time only—i.e., if you wait to log on at your desk to check out the specials they might already be sold out.

Now to my handful of impressions after using an iPad for a few weeks:

  • First, the device is exceeding my expectations. I do love it! I expected to have a tool that would allow for easy reading of email, books, and websites, as well as something simple for presenting slides. It does that more than adequately, and so much more. The keys to greatness lie in a brilliant piece of hardware. The device is thin, lightweight, features an incredible screen quality, responds well to the touch, and you cannot beat the easy on/off button. This is really what computing should be about in 2010, rather than the endless boot-up of bloatware operating systems and unknown creatures in the taskbar bin. With this platform and basic OS, the possibilities for developing apps that make best use of it are limitless. So far I’m loving Netflix, Kindle, The Weather Channel, TweetDeck, and GoodReader. And I’m now reading the paper newspaper again thanks to USAToday and WSJ apps. So many great apps and we’re only in the first couple of months of this thing, folks!
  • The “magazine” model of advertising is weak. I have downloaded a few magazines such as Wired and Esquire to test what this experience is like. Chris Anderson, editor of Wired, talked at an Ad:Tech speech a few months ago about how his company was betting heavily on the iPad and promised to have many cool bells and whistles in its digital version. I also checked out Esquire on an app called Zinio that lets you subscribe to digital editions of many popular magazines. At Ad:Tech, Anderson was excited about the fact that people would be “forced” to flip past each full-page ad in his virtual magazine. (See more on his speech here.) In my experience, the iPad magazine reading is fine, but I hated having to swipe past each ad. This is a worse experience than a physical magazine, which you can simply shuffle past quickly. In this case you’re likely to get a finger cramp with the number of ads crammed in! Again, maybe people notice such ads in the short term because this is a novel experience, but after a while we will all just tune out another piece of unwanted clutter.
  • Improved websites might eliminate the need for apps. What I mean here is that the Web-surfing experience with the iPad is so strong (despite the lack of Flash) that you might not need to develop apps to provide similar value to users. For example, I considered buying the ESPN app for iPad, but then I just pulled up ESPN.com on my iPad’s Safari browser. The latter experience was outstanding because the network has built a site optimized for iPads. So there’s no need for the $4.99 app. Remarkably, this is something I have not heard in relation to the launch of the iPad. It could be a threat to Apple’s desire to “control” the user experience for its own profit, as there is no need to purchase or download a special app. For consumers, it means you skip finding/downloading/updating apps. We are already working on making iPad-ready adjustments for some of our clients.

Despite marketers’ desire to make the mass/interruptive model work in mobile, and Steve Jobs’s record of overturning and improving business models, my advice to brands is to create an app (or an optimized website), not an ad buy, as a way to connect with consumers on the iPad. There are simply too many challenges of making an interruption pay out—and too many opportunities to delight people by creating added value on the iPad platform.

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Posted in Apps, mobile | 1 Comment »

Gives and Takes from #AdtechSF

Thursday, April 22nd, 2010

Yesterday I returned from the first Ad:Tech event of the year in San Francisco. As usual, it was a great opportunity to reconnect with friends in the industry and pick up a few new nuggets of what’s new in digital marketing. I also had the chance to give back some knowledge to the event participants during a session that I joined Tuesday afternoon. Here in this post I will share what I shared, as well as some of the highlights from the Tuesday sessions.

A New World of Word of Mouth: Using Influence to Re-invent the Impression

This was the session that I had a chance to present in, along with three other brilliant digital marketers: Tim Schigel, CEO of ShareThis, Jim Price, President of Empower MediaMarketing, and Joel Lunenfeld, CEO of Moxie Interactive.

I moderated the session and kicked things off with a marketer’s perspective on what’s new in digital marketing—and I promptly shocked (shocked!) the crowd by declaring that marketers have lost their perspective on what makes digital marketing great. I launched into the slides above, in which I attempted to make the point that if we dumb down digital marketing to being measured by the same, basic “impression” that traditional media has used forever we will kill the innovation that makes new media great. I love starting with a provocative note and I think the audience reacted very well according to the smiles, nods, and Twitter feedback I saw during my short segment.

Following me, Tim shared some excellent research on how people share content, and why we need to remember the right “word” in word of mouth. Jim shared a case study on how his firm used a killer new media model developed by ShareThis in which the Mederma scar creme was able to target advertisements to people who had shared relevant content with others. And Joel wrapped things up with a story about how marketers need to move toward looking at creating digital content that mirrors the video game industry—starting with the joystick that is the mobile phone. I will share their decks here when they are available.

Jamie Cohen Szulc—CMO of the Levi’s Brand

Jamie kicked off the Tuesday session with a keynote speech about how his brand has hit the recent button in recent months to become more meaningful to consumers’ lives. While only six months into his job, Jamie is pushing a revolution through this legendary brand that has fallen off the tracks in recent years. I could barely keep up with the gems that rolled off his tongue, but some of the quotes and insights he shared included:

  • “Marketers want more, global control at a time when the market is fragmenting more than ever.”
  • “The Internet taps into core human values.”
  • Levi’s has to become “original, real, and relevant to ME.”
  • The brief for the new campaign was simple: “Make people fall in love with Levi’s again.”
  • Although the new marketing work started with a TV commercial “to signify a new approach,” the brand is taking it to much more digital and meaningful work from here on out.
  • “We must move from Marketing ROI to creating Business Models.”
  • “Change must start from within—you’ve got to change the organizational culture first.”
  • Change is great and needed, but “you can’t disrupt a market in a day… it’s a long-term investment.”
But the highlight of his talk was a case study of how Levi’s created a T-shirt brand from scratch in South Africa. I can’t summarize it any better than the video below:

Overall, it was great to see a big brand CMO take the stage and talk openly and honestly about a meaningful marketing transformation in progress.

Chris Anderson Talks About the iPad

This was another treat—to see the Wired magazine leader and author of books such as The Long Tail and FREE give us his take on Apple’s latest game changer. While I think I would pay to see Chris talk about anything, it was particularly interesting to hear him share his thoughts on how he looks at the iPad from a magazine’s perspective.

Carrying a silver iPad onto the stage (I kept worrying that he would drop it), Chris started off by claiming, yes, this is the next big computing platform after the PC and mobile phone. He claimed that despite misses on tablet computing in the past, the time was ripe today because of three things:

  • The success of the iPhone showed the power of a rich media application platform.
  • The success of the Kindle showed how a flexible, convenient media and distribution channel brings a better experience.
  • The rise of cloud computing means tablets need a less powerful chip, less bloatware, and less hard drive space—which frees up companies such as Apple to build a lovely device.

Chris tied together magazine insider insights with topics that he explored in his books. His main point was that he was excited that the iPad will offer a much better experience for Wired readers. He and his team have been working on the platform for a while already, and they promise to launch a magazine that will combine the best of print and digital. Chris talked about how the killer platform of the iPad might allow for scarcity again, and create a better business model. His point is that “scarcity power” for print magazines was based on the cost-of-entry barriers of printing and distributing physical magazines. But the free information of the Internet is destroying these entry barriers, making scarcity a thing of the past, and killing the magazines’ business model.

He thinks that it will take high-end designers to make the most of the iPad’s platform—meaning that Joe Blogger won’t be able to offer a free experience that matches what Wired is working on. So quality of the experience could be a barrier to entry and driver of scarcity that leads to new profits. While I’m doubtful that this will happen, it would be a “good” kind of scarcity that is based on reader enjoyment rather than means of production.

Chris lost me completely, however, when he delved into the case for how advertising could be revolutionized on the iPad. He talked about how it could allow for engagement, move beyond measuring CPM, and be more creative. But everything he said is already possible today with Web-based marketing. A relative handful of people using iPads will not cause a revolution. Rather, organizations have to take the first step to embrace these features and possibilities that already exist on the Web. He also was in awe that people would now have to page through full-page ads again with the new iPad magazine experience. This, to me, is a step backward in the consumer experience. It just seemed like a lot of wishful thinking for a business that just cannot survive without the mass marketing model.

So thanks to my friends at Ad:Tech (especially Brad Berens) for inviting me to speak at and learn from this great conference once again. I hope to see you in the next events in Chicago or New York!

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Posted in Applications, Conferences, Uncategorized | 1 Comment »

Don’t Fear the “Splintered Web”

Tuesday, February 2nd, 2010

Apple-iPad-001

It didn’t take long for Apple’s iPad announcement to be co-opted by industries that worry about how the iPad will upend their legacy businesses. You might assume this to be the book publishers, who might fear lower margins on e-books, or newspapers, who are struggling to figure out how to profit from companies that make it easier to enjoy their content at no cost. But actually the biggest voice against the iPad so far is my very own industry: Digital Advertising.

Late last week two of the leading voices of digital marketing emerged with very public warnings for the advertising world if “walled gardens” continue to proliferate. In his blog, Randall Rothenberg, President and CEO of the Interactive Advertising Bureau, claimed that the iPad is a “threat to advertising.” And Forrester’s Josh Bernoff, the co-author of Groundswell, wrote in Advertising Age and his blog about how this new technology and others “means the end of the Web’s golden age.” When these two people quickly jump to pull the fire alarm, we all should probably listen.

Their overall argument is that the rise of new devices with proprietary software such as the iPad, Kindle, Android, iPhone, Facebook, and TiVo is ushering in an era of a “closed” Web. Bernoff calls this “The Splinternet” to suggest that we are splintering off into many sub-Webs with their own rules and access privileges. Rothenberg calls these “attempts to semi-privatize the Internet.” What both men fear is that this will make the jobs of marketers and advertisers much, much more difficult because of the additional work needed to adapt advertising to multiple relationships, creative units, and measurement standards—among other limits to “scale.”

From the leader of the biggest representative of the digital advertising industry, Rothenberg’s words carry a lot of weight. He is fearful of how this proliferation of semi-private Web devices will significantly weaken his members’ businesses:

“Put simply, a company’s opportunity to create, sell and use advertising effectively and profitably will depend on its ability to deliver it seamlessly across multiple devices…. …The creative agencies on the IAB Agency Advisory Board have said categorically that their single greatest obstacle to advertising effectiveness and growth is their inability to deliver the same rich-media ads to tens of millions of households across multiple sites because, as they put it, ‘the rich media toolkit differs too much from site to site.’”

As a former client-side digital marketer and current leader of a digital advertising agency, I certainly appreciate Rothenberg’s representation and passionate focus on protecting and improving our industry. However, I humbly disagree that this “splintering” of the Web will kill digital advertising. It might kill mass, interruptive banner advertising, but it is already ushering in incredible new forms of meaningful marketing.

First, the reality of economics is that you often have to get some level of privatization for market economics to take hold. Apple has created a great deal of privatization in the music industry through the iPod. This has led to a real, thriving marketplace in which Apple has an incentive and ability to continually improve the user experience. The better it makes iTunes, the more music it sells. Further, consumers like that Apple is protecting them from porn and malware. Many real, thriving businesses and happy consumers have been spawned by Apple’s efforts so far. The old music industry (like the old advertising industry) did not like how this market opened up, but it was their own fault for not accepting the change and figuring out how to win.

Google has also privatized the Web in a way, too. It has a search engine that sets rules about the content that it crawls and ranks, filtering out the “open” Internet into a closed ranking system that it alone fully controls. Its algorithm treats some content better than others, and the company even decides which countries’ laws it does and doesn’t want to obey. The result: A fairly well-organized tool that has made consumers’ lives much better, and created billions in value for both shareholders and advertisers. Again, this has taken money away from old advertising players such as traditional agencies and the Yellow Pages. Sorry, guys.

At the end of the day, marketers were not put in their jobs to ensure that the mass banner-ad market keeps running well. Marketers want to sell their products and services. Interruptive advertising spread across many digital properties at once is but only one of many ways to achieve this goal. In fact, it is a marketing strategy that is looking worse and worse—both in the online and offline world—whether standardization exists or not. People pay decreasing attention and trust to the growing number of interruptive ads that we experience in our lives each day.

On the other hand, tools such as Google and the iPhone are allowing marketers to find and forge meaningful connections with their customers and add value to their lives. Tools such as Nike+ or Kraft’s iFood app are not “easy” for marketers to execute with the push of a single ad unit. But they are taking marketing to a much higher level both in terms of the impact on customers’ lives and the company’s bottom lines. Standardized banner ads are the absolute least interesting way to win in this exciting digital world. I think leaders such as Rothenberg and Bernoff can take the bar much higher by helping us adjust to where the marketplace—and society—wants us to go.

I believe it will be impossible for the advertising tail to wag the device/technology dog. One might argue that profit incentives will press device manufacturers such as Apple and Amazon to embrace standardized ad units. But frankly there is probably not enough incentive for them to do so. First, why adjust everything to make $.01 per viewer (or less) in ad revenue when the same viewer will pay $.99 (or more) for apps? The economic pressure is to dump the ad sales force and hire more software designers to keep upgrading the devices. Second, by embracing standardized units these companies are selling out their superior user experiences to the lowest-common CPM. Making all media and devices equal devalues the difference of an iPad.

As a digital advertising industry, we need to force ourselves to stop trying to dumb down our work to standardized banners and counting impressions. We must become more focused on making digital marketing work—especially in a way that has a positive impact on people’s lives. Instead of holding up a sword against the horde of change, our industry needs leaders who will help marketers understand the reality of societal change and start building what works next.

As I wrote in a guest post on the 1to1 Media blog recently, mass, interruptive scale might die—but meaningful, personal connections between marketers and their customers will rise.

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Posted in Concept, Media, Organizational Behavior | 2 Comments »