Leo Burnett - Cultural Fuel

Most of you have probably seen the recent Steve Jobs presentation which included a few minutes on their planned iAds platform. (watch it here, starts at 44:00).

Now, apart from this being a pretty cool thing for everyone involved who wants to make ad money (marketers, developers, agencies) there are three things which come to mind:

1. Do conventional online ads experiences really deliver no emotion and won’t iPhone ads have the same problems with click through?

Okay, first off all, unlike Steve says, I believe there have been many examples of emotional ad experiences in online ads. The real question, though, has always been: are they all relevant in the user’s context? As always, people hate being interrupted in what they are doing when they go to an online portal. So how will this be different on iPhones?

Sure, click-throughs will improve because there is now a seamless transition in the app to ad and back to app. However, let’s not muddy the issue: this is just fixing a problem apps have while online portals really don’t so much (You can easily go back to the portal from an ad). Still, the human behavior of not wanting to interrupted in my task flow by advertising will probably stay the same. And apart from the fact that you always have your phone with you and it’s location-aware, it’s not like iPhones ads (and the examples he showed) are much more interactive or interesting than stuff you used to get on a Microsite anno 2000. This is solely a function of how creative the brand or their agency wants to make their app (or in old days, microsite) experience.

I think Steve just pulled the “more emotional” trick to make iAds look more interesting to brand managers, who are driven by the notion that Advertising has to be emotional and creative. Also, he is attaching this promise to an amazing track record in creating new platforms for brands to which no brand manager can say no, especially because there is a lot of frustration in the online marketer community on online metrics and really understanding what to do. So, if he can make his community happy through delivery of a simple to use platform,  he will make a lot of money. (see point 3).

2. Do people really not use search on iPhones when they really want to find something?

There is no doubt that when you have a content and subject matter related need that is covered by one of your apps, the chances are high you are going to use Yelp, Qype and the like to “search”. For that to be true though, those apps have to be highly embedded into your lifestyle. How many apps do you have on your iPhone that you don’t even use? On my iPhone it’s 80% of my apps I don’t regularly use. It’s like this: you liked the idea of them, downloaded them but you haven’t made part of your daily behavior. So, yes, for apps you use regularly use this works well. But for free apps (mainly games) getting people to branded content is still just advertising (see point 1).

So I really don’t know how that argument even helps with Steve’s case. I doubt people who search stuff in a topic area that is not embedded in their lifestyle that will first try to find a matching app in the Appstore, make the purchase decision, evaluate the app and then use it to search.  Therefore, for everything else people will use Google Maps on the go. Rest assured, we are going to do some UX research to check this out.

And to be absolutely blunt: aren’t apps just like web portals and iAds just like online advertising? Think about it. When you go to your few favorite news, sports, and topic of interest portals it’s like your few favorite often used apps on the iPhone. And Ads? Well, there’s ads that try to interrupt on those portals you go to. And now, they will be everywhere on the iPhone. Brilliant. Advertising has paid the livelyhood of all mediums so far:  print magazines, radio stations, tv stations, and online portals. In the future it will pay for app development.

Only difference is: this channel is owned only by Apple, the way to create for the channel is owned by Apple, the delivery and distribution platform is owned by Apple, and guess what? The media agency is Apple (see point 3). Well done.

3. Only 60% revenue goes to the application owner?

Imagine you had to pay 40% to your media agency for letting you use their media buying, and imagine that this media agency doesn’t actually have to do anything for you because you will still need to actually still do the stategy, creative and program the frigging ad. Wow. Granted, iPhones users right now still represent are very interesting and affluent target audience. But still, 40% percent?? If anyone can pull this off, it’s Steve Jobs.

So yeah, old wine in new skins, where the new skin is a single platform business and license to print money. Genius.

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