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Mediasmith Anvil |
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Volume 6, Issue 4
August 6, 2007 |
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iPhone: The New Apple of a Marketer’s Eye? |
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By Derek Leedy What does the introduction
of the iPhone signify for the use of mobile devices and advertising? Will
Google answer the call with its own product? Will the iPhone be a
game-changer for the rapidly growing mobile advertising sector? How might the
use of these devices presage the future of media consumption? The Mediasmith VP comments. It's here! Now what? So it’s happened. After all the hype, buzz and
interminable speculation, the iPhone hit stores June 29 to a warm reception
by both consumers and analysts. There have been, of course, complaints about
the cost of the service package, the lack of coverage and other
first-generation glitches to be addressed by both Apple and AT&T. As the
initial frenzy recedes, marketers and advertisers are looking to survey the
landscape and assess the short- and long-term implications for their
businesses. The preceding month was filled with multiple
spots featuring a sleek device and touting its wide screen, internet, mail,
mapping and widget capabilities as much more than the sum of its music and
video functionality parts. Clearly, Apple is positioning this as a breakthrough
product, not just another iteration of an iTunes-enabled phone. Meanwhile,
rumors are still circulating about a possible "Google Phone," but
nothing concrete has been announced. What does the introduction of the iPhone signify
for the use of mobile devices and advertising? Will Google answer the call
with its own product? Will the iPhone be a game-changer for the rapidly
growing mobile advertising sector? How might the use of these devices presage
the future of media consumption? iPhone’s
introduction to the market For the first time, marketers will be able to
reach a large number of mobile customers who are using a high-end device
primarily for entertainment consumption. The iPhone’s high price
tag, $499 for the 4GB phone and $599 for the 8GB version, did not seem to
faze the early adopter crowd. Informal data provided by Piper Jaffray
estimated that the vast percentage of consumers
purchased the 8GB version. It's a steep price
tag, but when we compare the prices of smartphones,
even with the cost defrayed by entering long contracts, the price isn’t
overwhelming in this context. Also, if we factor in the challenges of switching
carriers and the inevitable first generation bugs, the initial sales are
encouraging. The failure of MVNOs (Mobile Virtual
Network Operators) such as Amp’d and ESPN proved
that people were looking for something more than content channels, but it
also revealed that there was a market to be developed. The most telling fact
about consumers’ relationship with the iPhone is that many more people camped
out at the Apple Stores (where available) than the AT&T outlets. What this means for marketers and advertisers With those stylistically challenged belt holders,
we can all relate to ditching the smartphone
albatross on a Friday night (or earlier in the week for the younger folk) in
favor of something a bit more socially versatile, such as the Motorola Razr. However, these smaller phones do not offer the
promise of the iPhone. With its email, audio, video and widget versatility,
it will make the shift from day to night, with advertisers following suit. We are ready for the merging of our
communications technology with our entertainment. The millions who have a
"crackberry" addiction in one form or
another have been purchasers of the iPod. The median age has steadily climbed
as the player has become ubiquitous. We are sensitized to these expensive but
versatile gadgets, and we are sick of having to look after multiple ones.
We’re ready! |
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Mediasmith Morsel According to comScore, a leader in measuring the
digital world, the worldwide penetration of widgets* is on the rise. comScore attributes the creation of a worldwide
marketplace for widgets to the recent explosion in user-generated content and
expects the growth rate to increase rapidly as more and more sites across the
Internet employ Web widgets. For advertisers and publishers, the emerging
widget economy emphasizes the importance of integrating emerging Web 2.0
technologies with traditional media efforts as consumers gain increasing
control over their media consumption.
Source: comScore Widget Metrix Are
you are eager to experiment with widgets and emerging technologies? If so, look no further! Mediasmith specializes in
the integration of emerging technologies and digital media solutions with
traditional media programs. Please contact our Director of New Business, Michael Rosenfeld, for further
information. *Widgets are downloadable applications that live on websites and
distribute content across the Internet; commonly found on blogs, social
networking sites, and other personalized web pages. Widgets can distribute everything from news feeds and weather to
horoscopes and advergames. **Penetration = Number of unique widget
viewers/number of total Internet users for that region. This report focuses
on individual widgets, and not the platforms that deliver them. Desktop
widgets are not included. |
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The
Google factor It
really doesn't matter whether or not Google introduces a phone; its
applications are already installed on the iPhone, which will be readily
leveraged by marketers and advertisers. YouTube,
which has struggled for a long-term viable advertising model to justify the
steep price that Google paid for it, has found a strong distribution partner
after being hardwired into the iPhone. Eric Schmidt, Google’s CEO, has gone
on record citing the iPhone as a powerful device for current and future
Google apps. What this means for marketers
and advertisers Google
Street View, at once intriguing and frightening, will become ubiquitous among
the iPhone set. Advertisers -- who are struggling with the decline of internet
banner engagement -- know that the future lies with intelligently ensconcing
their brands and services within content, widgets and other applications. We
will all be closely watching how iPhone users customize their content and
applications in order to shape our future marketing and advertising. Google
certainly has the capital to create a branded phone, and searches on the
internet evince rumors of mysterious European skunkworks
focused on such an enterprise. However, as a dominant internet and application
force, do they want to enter the hardware arena against Apple, the reigning
king of the form factor? Either way, Google will be a major benefactor of the
iPhone’s success. Mobile
advertising implications The
short-term impact will be immediate, as advertisers are yearning to break
free from the constraints of current mobile advertising. This change refers
to limitations of current mobile application development platforms, such as
BREW. While many programmers complained when Steve Jobs announced that the
iPhone will only take third-party applications developed for Safari --
Apple’s proprietary web browser -- this still allows programmers to leapfrog
current offerings. Web 2.0 applications that run on the current Safari
browser will be viable for the iPhone. The
first such offering optimized for the iPhone is "OneTrip,"
a web-based shopping application. As other apps emerge, they are sure to
offer suggestions for alternative products based upon shopping or browsing
behavior. Admittedly, much of this performance is contingent upon the speed
of the iPhone’s EDGE connection, which has not
received rave reviews at this time. Though other smartphones
offer good browsers, such as Opera Mobile, I still contend that power
business users are much less likely to look to their phones for rich mobile
internet browsing. They will still prefer to access information from more
efficient, less engaging WAP sites. However,
the iPhone is not totally in step with the increasingly sophisticated
push-pull technologies used by mobile marketers to reach consumers on the
move. Over the past few years, most What this means for marketers
and advertisers In
the final analysis, can the iPhone be a category killer for current mobile
advertising? Yes.
As consumers become accustomed to sophisticated browsing and coverage
increases to combat slow connections, the days of the simple WAP banner and
mobile links are numbered. This isn’t to say that consumers won’t readily
click on links and banners that are relevant to their searches, but
simplified versions offered by AdMob and Enpocket are going to lose their luster quickly. The
premise that the internet experience cannot be ported over to a phone is
losing its validity. It is true that ads will need to be modified for a phone
environment, but the distinction will become less apparent. Much of mobile
advertising is based upon relationships with the carriers, who feel that they
own the customer experience. Apple’s relationship with AT&T will bear out
the true owner of the mobile experience beyond voice transmission. With its
Web 2.0 capabilities to take the user from browsing to buying, the iPhone
will go a long way to eliminate the need for third-party vendors to manage
the "soup to nuts" mobile marketing experience. |
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Mediasmith Morsel |
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The impact on future media
consumption The
evolution of devices such as the iPhone will give the term "mobile"
a vestigial distinction. We are merely looking at format sizes appropriate
for larger or smaller images. DVRs have continually crept into the
marketplace, causing increasing skepticism about simultaneous commercial
exposure or even the fear of total skippage of all
ads. iTunes is
featuring more and more video content for download, which will likely include
every major small and big screen release. All content will be accessible by
an iPhone-like device, transferable to an Apple TV-like device and consumable
by HD TVs and home stereos. This is not just an Apple-centric future because
there will be many competitors that offer nuanced advantages, and
open-sourced devices always drive innovation. But the current suite of Apple
offerings points toward a future where media can be accessed and consumed at
any point among your home, office and leisure destinations. Marketers and
advertisers must be prepared to create holistic communications that can
convey their value proposition within any of these consumption points. What this means for marketers
and advertisers Convergence
is a term that has lost much of its meaning as it continues to fail to come to
fruition. The computer-centric entertainment room does not yet exist in most
homes. The adoption of an iPhone or possible Google Phone will invariably
help to accelerate this convergence. Apple TV and Joost are all much more
attractive if we are constantly using the push-and-pull capabilities that are
inherent with these new phones. They can become the true universal remote
controls that feed our big screens and speakers for movies, video chatting
and aspiring deejays. And we can skip all the intermediary steps that are now
involved. Even the savvy consumer is overwhelmed by downloading on the
internet, setting up their TV schedules, arranging their song lists and then
morphing into a "lean-back" experience. As
advertisers, we must contemplate what will compel the consumer to ever
willingly be exposed to a marketing message again. Brand placement is having
its challenges for ROI, and branded content will be undesirable if we can get
it by another means. It becomes a true exchange of value for consumers' ever
shrinking time in their personally controlled content environments. Current
offerings such as Free411, which enables callers to avoid steep information
charges if they listen to a short commercial message, may be the currency of
the future. Advertisers have to increase the tangible value we give our
target audience in exchange for their time and attention. Why would a phone
trigger such a revolution? It is the most personal of all devices and most
people would lend you money for a call before they would let you use their
phone. If
the iPhone lives up to half of its promise, then we are on an even faster
ride for emerging behaviors in media and marketing. |
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Mediasmith Morsel The July issue of Nielsen Consumer Insight*,
an online newsletter from The Nielsen
Company, delved into the mobile video viewing habits of the mobile media
consumer. While adoption of mobile video is still in its early stages, and
mobile video consumption is fairly low (approximately only 3% of total U.S. persons 12 and
older accessing the mobile web during Q1 2007 according to Nielsen), as
consumers gain access to high speed networks and previously high-priced
handsets that optimize mobile content consumption, we can expect the
penetration and use of new mobile services to grow. Among
the key findings:
Source:
“Mobile
Mania: Inside the Mobile Media Consumer” *Consumer Insight brings together all of Nielsen’s global marketing,
media, entertainment and retailing services to provide unique insight into
consumer behaviors. |
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Conclusion The iPhone will continue to be a success; the rate
of adoption is debatable but unstoppable. There will be price cuts and other
maneuvers to maintain its distribution momentum, but after the holidays,
there will be millions of users. While Apple is its own worst enemy in not
making the iPhone a viable business alternative, it will break down barriers
to form a not yet existent audience of mobile entertainment consumers.
Advertisers will have to learn how to communicate to this new audience in
compelling ways. Google will remain a force in the mobile space
with or without its own phone due to the plethora of applications that will
be adopted on the iPhone. The brilliant minds at Google may learn from the
limitations of Apple’s strategy to create a device that is more amenable to
open source innovation and therefore more readily adaptable to business and
the convergence of media. The short-term implications for mobile
advertising are very interesting. We will have to use all the current
platforms for the time being, but they will become less of a factor as these
devices penetrate the market and become more advanced. The long-term
implications are by no means dire; they represent a new holistic way to reach
the consumer if they are spending more time with a single device. The challenges are stated above, but if we aren’t
excited about the potential, we shouldn’t be doing this for a living. A version of this article originally appeared in imediaconnection |
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Contact Mediasmith, Inc. |
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