What The iPad Means For Brands: Mindshare POV

2/6/2010 The iPad: New Day Or False Dawn? The iPad: New Day Or False Dawn? What The iPad Means For Brands

2/6/2010 The iPad: New Day Or False Dawn? Table of Contents Year of the iPad ................................................................................................................................. 2 A Mass Market Device? ...................................................................................................................... 3 Open Platform or Walled Garden? ...................................................................................................... 3 Future of Publishing?......................................................................................................................... 4 Advertising Nirvana? ......................................................................................................................... 6 Don’t Believe The Hype? .................................................................................................................... 7 Year of the iPad People seem to be liking the iPad…We’ve sold one every three seconds since we launched it. Steve Jobs, June 2010 In terms of technology, 2010 has undoubtedly been the year of the iPad. Announced in January, after several years of rumours, released in the US in April and nine more markets in May, by the end of July it should be available in around 20 countries. It has been hailed by many as being the future of everything from computing to publishing, whilst, as with the iPhone, publishers & advertisers alike have pounced on the new device, launching apps for their products and services. But will the iPad live up to its hype, and should brands & publishers be falling over themselves in the way that they are? As with most things, the answer is a mixture of yes & no.

2/6/2010 The iPad: New Day Or False Dawn? A Mass Market Device? Customers around the world are experiencing the magic of iPad, and seem to be loving it as much as we do. Steve Jobs, May 2010 Sales of the iPad have certainly been exceptional, with the international release being pushed back due to higher than expected demand in the US. As of June 1st Apple stated that it had sold 2 million iPads, which is pretty good going for a product that’s only been on sale for 60 days: to put it in context, it sold its first million iPads in just 28 days, half the time it took to shift the same number of iPhones. However, when we consider that in 2009 there were around 200 million PCs and 240 million web enabled mobile devices shipped globally, it shows that the iPad is still a niche item, which is something that isn’t always obvious when one counts the column inches it’s generating. However, with that niche being made-up of cash-rich early adopters, the opportunities for brands to benefit from a relationship with the iPad are obvious. Whether Apple will be able to do with the iPad what it did with the iPod, and appears to be doing with the iPhone – that is, to turn a niche device into something that becomes truly mass-market – remains to be seen, particularly considering its price (especially outside of the US). Open Platform or Walled Garden? We believe that Apple…has taken a step that could undermine this next chapter of the web…in which mobile devices outnumber computers, any individual can be a publisher, and content is accessed anywhere and at any time. Chuck Geschke & John Warnock (Adobe Co-founders), May 2010 However even if the iPad doesn’t become mainstream, it seems likely that tablet devices in general will become much more common: Asus has just announced two tablet devices, which are likely to be more affordable than Apple’s, whilst One Laptop Per Child has stated that it plans to develop a $100 tablet for distribution in

2/6/2010 The iPad: New Day Or False Dawn? both developed and developing markets. Interestingly, the Asus & OLPC devices will run on Windows & Android respectively, both more open platforms than Apple’s. And openness might yet become a defining factor in the tablet wars. Though Apple continues its battle with Adobe, refusing to support Flash on the iPhone or iPad, other platforms have no such qualms: both Nokia and Opera have said that they will continue to support Flash. Meanwhile, on the content producer side, a number of major Hollywood companies, including Time Warner & NBC, announced in May that they wouldn’t be converting their video libraries from Flash in order to run on Apple’s devices. Whilst iPads are undoubtedly sexy, there has to be a question over whether a device can truly go mainstream if it doesn’t have the content to back it up. Future of Publishing? I got a glimpse of the future last weekend with the Apple iPad. It is a wonderful thing…it may well be the saving of the newspaper industry. Rupert Murdoch, April 2010 Much of the hype surrounding the iPad’s release has come from, and been about its impact on, the world of publishing. Book, newspaper & magazine magnates have all been breathless in their praise of the device and its potential to save their businesses from the shocks of the dotcom era, whilst much of Apple’s advertising has shown the device being used to read digital newspapers. In the US, a conglomerate of publishers has come together under the name Next Issue Media, with the aim of mapping out a future for newspapers & magazines in the digital world. They demonstrate the ability of the iPad to render the reading experience in exciting new ways, with embedded video, images & audio. They’re working on ways to harmonise ecommerce, ad formats and output protocols for publishers, all with the aim of turning the iPad (and iPhones, etc…) into the future of publishing. But how realistic is this? Not very, argue a number of respected commentators. Paul Carr suggests that whilst the iPad might kill Amazon’s Kindle e-reader, it is

2/6/2010 The iPad: New Day Or False Dawn? unlikely to lead to a surge in the purchase of digital books as its display is simply not designed to support the consumption of long-form content. Basically, it makes your eyes hurt. And at that point the iPad will indeed have killed the Kindle. But, for millions of casual readers, it will also have killed something far more valuable: the experience of reading for pleasure. Paul Carr, April 2010 And what about newspapers and magazines? Well, the app for Wired magazine was purchased 24,000 times in its first 24 hours. However, Wired’s audience is a very tech-literate one, and so it shouldn’t come as much of a surprise that many of them are the early adopters who have bought iPads. But as Peter Preston of The Observer points out, the revenue from such apps is unlikely to staunch the losses newspapers are racking up. Quoting analysis by Enders Analysis he suggests that whilst revenue for publishers in the UK might reach around £250m (minus Apple’s 30% cut), British newspapers generated over £3bn in 2008. So, just as The Guardian’s iPhone app, which sold 70,000 in its first month generating an estimated £117,000, is hardly likely to plug its rumoured £100,000 a day losses, any media exec pinning his future on the iPad might want to hedge his bets. Especially as a number of commentators have suggested that the apps released to date actually provide a less enjoyable browsing experience than viewing the content in a simple browser for which the consumer pays, in most cases, nothing. The future is never now. And the future of journalism is definitely not a stack of banners spiced with videos, exported from a paper layout program. You need to try harder. Oliver Reichenstein, May 2010

2/6/2010 The iPad: New Day Or False Dawn? However it’s quite likely that Apple’s foray into the tablet market, and the upsurge in new product announcements from competitors, could yet create what is, to all intents and purposes, an entirely new sector. And whilst this might not prove to be the savior of publishing, it certainly paints a (digital) picture of what the future might look like for these companies. The real challenge is not how to monetise the iPad (which Apple’s iAd should go some way to doing) but how to cut the costs of the print-side of the businesses and still maintain the same structures – and that’s something even Steve Jobs is unlikely to be able to solve. Advertising Nirvana? Well, we’ve got a lot of free apps — we like that, users like that…What some (developers) are starting to do is put mobile ads in their apps… and most of this advertising sucks. Steve Jobs, April 2010 So what does all of this mean for advertisers? Well, as already discussed, at present the iPad is very much a niche device, but one which punches above its weight in terms of the desirability of that audience and the publicity it generates. And the audience it attracts certainly seems keen to test everything that the iPad has to offer, with over 1 million apps being downloaded on its first day of release. As a portable device, but one with a browsing experience far beyond that of even the best mobile phones, the iPad opens up new ways for brands to connect with consumers. Targeting content and experiences based on location and demographics, but with rich media experiences, means that brands could create deeper and more durable interactions with consumers. However, the app rush also exposes two potential issues for brands. Firstly, the fact that the iPad is definitely much more than simply an oversized iPhone means that you can’t simply port your old iPhone app across, at least not if

2/6/2010 The iPad: New Day Or False Dawn? you want it to provide a high-end experience. And, just as the iPhone’s app library is now full to bursting, so a similar rush to develop iPad apps could mean that it becomes very hard to stand out from the crowd. With more things than ever clamouring for consumers’ attention, any brand app or experience will have to be exceptional to really break through. Don’t Believe The Hype? What then is the final reckoning for the iPad? Whilst it has generated enormous publicity it is still a niche product, and likely to remain so in the near to mid-term future. But by, once again, creating a new sector, Apple is likely to spark a wave of competition that should drive costs down and specs up. Outtake: Brands shouldn’t simply throw money at tablet apps, but should definitely be thinking about how their audiences are using them, if at all, and how they could fit into that usage. The continuing battle between closed environments and open platforms will continue, with no winner obvious at the moment. Whilst it would be stupid to ignore Apple’s latest uber-gadget, it would be a very brave exec that bet everything on one or the other. Outtake: In the mobile wars, all the major operating systems have announced a common app language. Bar Apple. Investing in iPad apps is certainly not a bad idea, but be prepared to have to recreate it for other systems as they come along, Tablets start to show us what the future of content consumption might look like. At present however too many magazine/newspaper/book apps simply recreate the printed page in a digital format, whilst the revenues likely to be generated won’t plug the massive defecits saddling so many publishing companies. Outtake: Forward thinking brands will be working with publishers to re-imagine the world of publishing. Just as Time Warner & Toyota’s Mine showed how printed magazines might evolve, so there are opportunities to do the same on tablets.

2/6/2010 The iPad: New Day Or False Dawn? Advertisers will want to test the capabilities of the iPad, and use it to create more immersive experiences for consumers. But the challenge will be to stand out and, as always, it will come down to creative, rather than technical details. Outtake: Just because you can do something on the iPad, doesn’t mean you should. Ask yourself why anyone should care about what you plan to do, and keep asking until you have an answer. To paraphrase Bill Clinton, It’s the creative, stupid. And what about us, will we all be rushing out to buy an iPad? Well, I’m no Apple fanboy, but as the owner of a Macbook, iPod and iPhone I’m clearly not immune to their wiles either. But for all of that, I’m going to follow the advice of British satirist Charlie Brooker, and wait till it’s cheaper and lighter, and in the meantime I’ll continue to stare enviously at my friends who have bought what Brooker describes as the world’s most expensive rectangle. Author: Ciarán Norris, Head of Social Marketing

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What The iPad Means For Brands: Mindshare POV

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