The future of ad sales (2)

Till today, Google has the advertising clout with major brands all over the world thanks to its desktop search empire. Google wants to buy itself into the mobile advertising business by taking over mobile ad firm AdMob (late 2009 and currently being investigated), which will provide the same type of in-app ads like Apple. Despite the lack of track record in digital advertising, Apple on the other hand, has a strong mobile cachet thanks to the iPhone, which has sold more than 50 million units in three years, and the iPad, which sold over 500,000 units in the first week (1 mln after 1 month!). iAd already has analysts rethinking their predictions for advertising on the mobile Web. Steve Jobs clearly believes that ads in the context of apps make more sense and have more effect than the generic mobile search.

Creative agencies who have been presented to by Apple on using iAd and could only reveal bits of the presentation, such as this: each published advertisement will carry the iAd logo to differentiate it from other advertising content, that there will be only one advertising banner per screen and that the ads “look and behave a lot like apps”. Unlike browser-based ads, iAd ads can tap into all major OS features of the phone, from compass and accelerometer to the multitouch interface.

Mediabuyers’ view:  Apple is going to sell 100% of the ads. Apple doesn’t do cheap, they do premium. So I’d expect buyers to become trained very quickly that this is expensive inventory.

Another view (blog by Henry Copeland): Apple thinks it can divide the market as it does with app developers: the creator and the buyer, mediated by Apple. The market for advertising is far more complex. First there are the end clients, or: brands, with the money. There are various types of agencies: creative, ad buying, planning, strategic. Then there are the publishers and other content creators. There are ad networks. There are tech companies running around trying to sell any and all of the other players their latest innovation. And of course there are sales teams larded throughout, each selling to the next level in the pipeline. Everyone talks with everyone, covertly trying to eat their partners’ lunches and win an upper hand.

Copeland goes on: “Maybe Apple doesn’t know this, but most of advertising innovation isn’t instigated by agencies, but by publishers and ad networks and tech vendors competing tooth and nail to win business from agencies and their clients.”  I partly agree with Copeland, but this new medium called a ‘tablet’ is taking the market by storm. The numbers of iPads sold within 28 days are staggering.

Key issues for print publishers these days:

1)      How to stay relevant for readers and brands using their platform.

2)      What publishing format will prevail in the next 10 years – print, internet or mobile apps?

3)      How to protect your expensive content?

4)      How to deal with new dominant players like Apple?