iAds is a direct slap in the face to what used to be one of Apple’s biggest allies–Google. Apple figured out they have an untapped captive audience which means Apple can bombard this audience with ads and make even more money.
Google could never tap the AppStore market no matter how hard it tried. Sure, the AppStore is really just a bunch of webpages, but even so, Apple would have to include the script that would allow Google ads to run which Apple would never do.
During his speech, Jobs quoted the following numbers:
• iPhone users spend an average of 30 minutes a day in Apps
• If ads were displayed every three minutes, that would be 10 ads a day per user
• There are over 100,000,000 iPhone and iTouches that have been sold.
• LOTS of money could be made.
One must admit, this is a very clever entrepreneurial move. Of course, the question becomes, “If Apple has done very well during the current recession, why is it that Apple wants to make tons more money by selling ads? Are they just being greedy?” Perhaps this is one of those situations where you just don’t look a gift horse in the mouth.
iAds WILL Drive the Market – HTML5
iAds is really going to drive the online market in more ways than one. All of the mock-ups used during the demo were delivered via HTML5. Though Google has been pushing HTML5 via Chrome (and Mozilla via Firefox) the question has been, what video formats should HTML5 support. Now, that question is going to be solved through market place competition, not some standards setting body.
There are pros and cons to this.
The pro is that whatever people use the most–also known as the path of least resistance–should float to the top unless some interested party with plenty of money and advertising suave comes along and convinces the market to shift to their proprietary format. Mozilla has been fighting to keep Ogg Theora in HTML5–nay, for HTML to only support open standards like Ogg Theora–yet, Youtube and Vimeo have went the way of H.264. Jobs did not comment on what video encoding the demoed iAds were using, but the one technology it wasn’t using was Flash.
The con is that truly open codecs may not be included in HTML5 at worst or will be included but abandoned and ignored. As has been pointed out on various places on the web, accepting closed, licensed, proprietary codecs will lead to the .gif fiasco all over. Open Source advocates are begging netizens to learn from history and not repeat this costly mistake.
Of course, Adobe has been banking on Flash being around on the internet for a long time. In fact, Adobe recently complained to the SEC that the exclusion of Flash from the iPhone was going to hurt their bottom line. Boo hoo!
iAds Incentives App Development
Ostensibly (the program wasn’t discussed in depth) developers can choose whether or not to include ads in their apps. Of course, since developers can generate more revenue if they include ads than if they don’t, ads will be included wherever possible. And why not, when developers are getting a 60/40 split in their favor?
Due to Jobs’ cryptic word choice, it’s difficult to tell just who exactly will be allowed to include ads in apps. Jobs talked about “keeping free apps free” but went on to say that “our developers need more revenue” citing the low prices of apps. So will iAds be for free apps only? What are the rules?
In either case, Jobs does have a point: there is a captive global audience which can drive a lot revenue for both Apple and developers. Why would these developers choose to develop for a platform such as Android for free when they can instead get paid to develop for the iPhone OS? Sure, there will always be that healthy Open Source community that want to share their code and believe that code shouldn’t be proprietary, but those developers have to eat too. How will they pay the grocery bill developing for Android?
Bonus: Does Palm have a large enough market with WebOS to attract any developers?
iAds iAnnoying?
The most troublesome things about iAds was how they would be displayed. Would they pop-up, annoy the user and not be able to be gotten rid of until an animation played much like the ads that run on IMDB.
All three demos of iAds started with a banner ad on the bottom of the app. Once the user clicked that banner, the ad took over the screen, but there was a close button in the top left-hand corner that allowed the user to dispose of the ad with one tap. If all iAds follow this paradigm, there should be a perfect harmony: ads will display but not be intrusive and when the user wants the ad content turned off, it’s turned off.
Print ads vs. iAds
One issue that wasn’t brought up at the developer’s preview was the various periodical apps being developed and how iAds will or will not effect that market. Consider: because ePub was designed for reflowable content, it’s unsuitable for artwork-heavy publications such as comic books (graphic novels if you will) magazines and to a lesser extent newspapers. What does this have to do with advertising? Outside of classifieds–and even then, there are exceptions to the rule–ads in print media are all images. Add to this fact that magazines often do spreads, and you’ve got a e-publishing mess on your hands. The only solution is to create a .pdf file and hope and pray that whatever device is being used to consume the content is large enough or has an app that eliminates the need to constantly zoom in and out and move around the publication.
Because of this problem, proprietary apps are being built to display periodical content. Presumably, the content in these apps will be electronic versions of their dead-tree counterparts. If advertising is sold in the dead-tree publication, will Apple allow that same advertising to also be included in the electronic app? If apps come with such paid advertising (for the “app developer” in this case, the publication) will they also be allowed to run iAds at the bottom of their app to further boost their revenue?
Wrap-up
iAds will be a game changer, pushing HTML5 forward faster than present solidification and adoption. iPhone OS 4 does not for Flash and hence Flash-based ads on the platform. Via iAds, Apple is upping the ante between Apple and Google, beating Google at its own game in a market where Google can’t compete, making periodicals the item to watch in conjunction with iAds for real game changing occurrences.
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