Kelly Scott Madison

iPad & Magazine Advertising

03/01/2011

 

By: Caroline Alcock, Senior Media Planner

What is it?

Mobile devices have been revolutionized with touch screen technology.  With the flip of a finger people can now read the daily newspaper, read a new book, check emails, play games and catch up on celebrity gossip in real time.  While consumers can do this on their desktops through traditional mouse clicking, Apple has led the market with simple icon applications (aka apps) that allow consumers to instantly connect to their favorite websites, games and brands through their iPhones and iPads; 10 million apps were downloaded in the first weekend of Apple launching their app store. By the end of 2014, mobile users are predicted to have downloaded 185 billion apps with revenue expected to total $58b. Based on these numbers, apps are clearly becoming a dominant player in the digital world.

Businesses are introducing new strategies to broadly appeal to more consumers and creatively display their products through apps. Businesses design their apps to be useful, interactive and entertaining. For example Proctor and Gamble launched a Gillette uART app for the iPad.  The app gives users the option to add a picture and use their finger to shave in facial hairstyles. The “Gillette” brand is strategically placed in the bottom right hand corner of the app throughout the experience.

Advertisers initially approached new media with caution and tiptoed their way into the waters of mobile phone and internet advertising.  The iPad (along with other tablet devices) may be a game changer. Consider the following: Apple sold more than 3 million iPads 80 days after it was launched; it has now sold almost 15 million; the ABC iPad App had over 400K downloaded shows in its first month; and initial research indicates that app ads are influencing purchase decisions (based on an Adology study).

How is the publisher’s content transferred to the iPad?

As mentioned above, there are multiple uses for the iPad.  However, magazine publications have quickly embraced the technology. Due to falling circulation numbers within newspapers and more people turning to online to get their news and entertainment updates, magazines recognized the opportunity and acted. If people are going online to read, why not create an electronic version of their publication?

For magazines, there are at least two schools of thought regarding their iPad extensions: maintain the integrity of the original publication; or offer interesting brand partnerships and retail platforms within the publication.  By replicating the print version in a digital format, consumers and advertisers have a sense of familiarity.  The Economist is one such example.  By “remaining true to their brand”, it has received praise for its app by users and distributers. However, these magazine apps are considered conservative and underwhelming by some because they do not take full advantage of the platform’s technology. 

Offering partnerships and retail platforms to advertisers provides the user with a different and unique experience. Publications, like Wired, provide searchable and browsable product reviews, videos and blog posts that link to advertiser destinations. 

Some publications go further: the September 2010 Runner’s World on the iPad was exclusively sponsored by Puma.  As the exclusive sponsor, Puma’s banner ads could be found on each page along with full page ads throughout the magazine.  User’s had the option to shop via Puma’s giant mobile-optimized site within the app itself.

What are the results?

Considering the iPad just launched in April of 2010, determining success of app ads is still a work in progress. Each app is different in its acceptance of third-party tracking.  For the most part, publications are responsible for providing advertisers with reporting, but some apps have started to accept third-party tags to verify delivery and measure brand interaction. 
Data and analysis based upon buying patterns and behavior of the end user still needs to mature in order to develop consistency in results. And while the iPad is undoubtedly popular, it is still only used by a small percentage of consumers. In other words, an ad on an iPad app can only reach a fraction of the viewers as a commercial would on American Idol, for example.
Early studies are showing positive results when it comes to app ads ability to influence consumer purchase intent.  Nearly 50% of home furnishing, clothing, personal care services, automotive, insurance and electronic purchases by consumers with apps reported that they were influenced by app advertisements. These consumers tend to be a well educated, early adopter audience – a highly sought after target for certain advertisers.

How are iPad ads being purchased?

  1. Price ranges vary dramatically by publisher.  At launch, iPad advertisements on print publishers’ applications cost anywhere from $75K to $300K.  Early integration was dominated by blue chip brands looking to capitalize on the buzz of an emerging technology. However, advertisers have been pushing for cheaper ad prices on the iPad.
  2. It’s easier and less expensive to create and publish ads electronically than create the same ad in printCirculation of the print magazine is still much higher compared to magazine's electronic distribution. Publishers, on the other hand, have been pushing for higher prices because of the exclusivity of the clientele and popularity of the new technology.

Industry-wide pricing continues to be an issue between publishers and advertisers. Some publishers (like Time, People and Reuters) will continue to charge a fixed fee similar to their print pricing model, while others will adopt a more traditional digital CPM model.  Presumably, once usage develops a predictable pattern, industry pricing practices will change.

What we think:

When considering which app to advertise in, some basic guidelines/best practices should be considered.  Based on publisher research and our own experience, here are a few key best practices that brands should consider before advertising.

  1. Embrace the functionality of the platform. Popular applications provide the user with interactive experiences through video, photos and links to websites
  2. Execute clear and simple application design--confusing applications are more likely to be ignored, thus reducing impact of the brand being advertised
  3. Be creative with new media--repurposed advertisements do not attract the consumer as well as new creative
  4. Tell a story--engage the consumer by creating narratives through your applications
  5. Help the consumer make a decision by providing additional information about the product such as color, availability or even the ability to purchase within the app.KSM recommends consideration of iPad ads in our clients' media plans if they make sense based on client goals, budgets and objectives.  This is especially true for clients that have higher income targets and have heavy print initiatives.

As technology advances and adoption increases, we envision  that iPad/tablet advertising opportunities will mature and become more main stream.


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