April 12, 2010
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iAds
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.
Comments (43)
I’ve always felt that if a company tried to take advantage of the people by exploiting the thing’s popularity that the people would in turn DESTROY THAT COMPANY.
One of the reasons the iPhone/Touch is so popular? NO FUCKING ADS.
@ehowton - I think that the reason that the iPhone is so popular is that it works right out of the box and it’s so easy to use that even ehowton a two year-old can use it.
Well, there’s certainly no shortage of stuff to comment on here ProfessorTom!
First, I think its far from a slap in the face of Google. First and foremost, its proof that the advertising based business model is alive and well. Yes, its going to change over time, but with the two big dogs in the neighborhood fighting over the same bone… must be a good bone. Second, Google needs the competition iAds provides to avoid a pesky anti-trust investigation into their purchase of AdMob. Again, if two dogs are fighting… Oh, and at the end of the day… when has Steve Jobs ever been shy about taking your money?
Certainly iAds will influence the market, but drive it? Do they really have enough juice to drop into Google’s playground and take over the ship?
As for Flash and HTML5… Flash is dying a slow and unfortunately painful death. Just like Assembler, COBOL, FoxPro… name any development environment with millions of lines of code out in the wild… it will take time and will be around for a while, but the leading edge is almost done with Flash today. Sorry Adobe.
iAds will be pretty… just ask Steve. He’d have it no other way.
AS for periodicals, they’re just stuck in their own mire. They’re so enamoured with the way things have always been that they can’t see how things could be. Someday they will either pull their head out of their collective duffel bags or some new upstarts will shut them down. In the mean time, don’t look for any great innovation from the established journals!
Great post… keep ‘em comin!
@jtrigsby
@jtrigsby - there’s certainly no shortage of stuff to comment on here ProfessorTom!
That was my goal. I just hope that more eyes see this post soon enough as I think that there’s a lot of discussion that isn’t being had on the subject.
The interesting thing here about Google is that there is no way they could tap the Apps unless the do so on Android, but given that ad patent Apple filled a few months back, I’m not sure they will be allowed to copy the idea. Something to talk about tomorrow.
when has Steve Jobs ever been shy about taking your money?
When is never?
Certainly iAds will influence the market, but drive it? Do they really have enough juice to drop into Google’s playground and take over the ship?
Isn’t that the real question? How much time do people spend in apps vs. on the web? Granted, I’m not saying this is Google’s death nail, but it is a reality check.
Sorry Adobe.
Adobe is a sore, whiny loser.
AS for periodicals, they’re just stuck in their own mire.
I smell an upcoming blog post in which you expand on this thought.
In the mean time, don’t look for any great innovation from the established journals!
I figure that the innovation will come from places like Wired, Engadget and things like People and hopefully something like Time. Again, this is a big game of wait-and-see.
Great post… keep ‘em comin!
Thank you, Sir! You’re too kind.
I think my next post will be the “making of iAds” — discussing how I used Scrivener to organize my thoughts and compose this post.
Heading over to your site to listen to Life in the Internet!
Well, I see Google ads on my iPhone now… I guess I’ll have to pay attention next time to see if they’re in an app or not. Actually, I know they’re in an app… they in my mancala game. Anyway…
The difference between “in apps” and “on the web” is blurring anyway. I personally don’t have any reservations about apps becoming the way we consume designer content rather than through the browser. In that world, the Internet becomes what it was originally meant to be… a conduit for the data to pass through. I have written about this a couple of times on jtrigsby.com ( see for example The Web of Tomorrow ).
@jtrigsby
I love my macbook, but lately apple has been nothing short of obnoxious. Smart business moves, but completely obnoxious.
I always enjoy some bona-fide Apple bashing!
@Justin_DeBin - Where’s the bashing?
@Thatslifekid - Obnoxious sells in certain markets.
@ProfessorTom - Meh! It just depends on how you read the post.
@Justin_DeBin - Rec the post, have your friends come read and let’s vote on it!
I don’t know about voting but I rec’d it.
@Justin_DeBin - You’re totally awesome. If I had free iPads to give away, yours would be in the mail right now.
@ProfessorTom -
iAds…at first glance it looks like a STD you can get from an iPhone.
Came here on Justin_DeBin - rec. Not really sure about the apple bashing spin. I’d have to reread it later.
@Ro_ad808 - That’s what I told him and why you’re here. Let’s put it to a vote!
@Like_A_Tigah - I think that the iPhone has become a personal massager for plenty of nubile teen girls, but there are no reports of STDs. There have been reports, however, of SDKs.
@ProfessorTom - @Ro_ad808 - @Like_A_Tigah - Meh! Who cares at this point, I got Tommy a lot of comments, that’s whats important, right?
@Justin_DeBin - Something like that. Just imagine this post making the front page of Xanga. How refreshing!
@ProfessorTom - That would be cool. Let me know if it does.
@Justin_DeBin - I’ll make sure you’re the first to know!
I’m a linux guy. So I want to like android phones. I don’t have a smartphone at all right now. There more I look at smartphones though, the more I think that Palm would the way to go for me. The person doing most of the convincing of me uses Apple products for just about everything other than his phone, basically saying to me I love Apple even when it isn’t rational to do so, yet WebOS is so good that I couldn’t help it. Of course, since I can’t afford either, what I would buy doesn’t matter much, but that is my impression. My impression comes solely from observing my friends talk about (often) and play with (occasionally) their smartphones.
As for open-source apps, you can probably guess my position — it’s the position ESR had when Netscape was convinced by him to form Mozilla. So naturally, I’m expected at this point, to reguritate ESR’s magic cauldron, but instead I’ll link to it and enumerate the ways he claims that open-source can make money. Since I’ve never developed or sold any app for any platform, I have no idea if he’s correct or not, I only know that his ideas have been written down for you to read. But here they are:
1. Use a free/open-source app to secure the market position of a profit-generating app.
2. Use a free/open-source app to sell hardware. (An incentive for Apple or Google or Palm to develop free apps, but not for anyone else, really.)
3. Give away a free/open-source app, sell service for that app. (What Red Hat does. I didn’t see this as being relevant… until the iPad. Now people are going to want to, say, do taxes on something with an app database, and they might want to pay for help.)
4. Give away a free/open-source app, sell the documentation, or sell t-shirts.
5. Use a free/open-source old version of the app to boost the market for the non-free/closed-source current version.
6. Give away a free/open-source app; sell a brand of that app, that is, sell a guarantee that a certain version of that app has certain compatibilites.
7. Give away a free/open-source client to a server that requires a paid subscription. (Or more generally, free-software+paid-content.)
The essay containing this list was last revised in the year TWO THOUSAND, but I lack the imagination to add to it any more than what I added in the parens for point 3. I’m working under the assumption that open-source CAN make money. Which of these 7 ways do you think that open-source iphone/palmpre/android apps can make money?
I feel like if I were an app developer, I would be focusing on 1, 3, 5 and 7, and if I were apple/google/palm I’d be focusing on 2. Honestly I feel like the most profitable application of ANY (non-free/paid OR free/opensource) app on this type of platform would be to boost the market for an app on another platform, but my own lack of money might be clouding my judgement here.
And so by the end of this comment, I’ve ended up with enough off-topic words for a post of my own… but I’m lazy… I’m still thinking about it. In any case I’d like your thoughts specifically, in addition to what you think other people probably think.
Another thought: By the GODS I hate adobe. They’re the ones who desensitized the average web user into thinking that it’s OK for websites to run code on your computer without any kind of security check first, let alone before asking your permission. But I’m aware that my opinion on this point would categorize me as a crank if I say it too loudly.
EDIT: Now that I think about it, Chrome is a step in the right direction, running each tab in a separate thread. Or am I even correct that that’s what Chrome does? I should build a computer + code a browser that runs each tab on a separate CPU+RAM+mobo as part of a cluster… …wait a second I just realized that that idea is terrible.
wow, bro -i never NEVER enjoyed a post/comments that i understand so little of SO much - how can i get you more props? is this as important a post as i think it is? and WHY for the love of all that i know about W NT/95/atari tank battle am i kissing up here?
@pamilvr - i never NEVER enjoyed a post/comments that i understand so little of SO much
Thank you. I’ve received more sincere praise for this post than I have any other in quite some time. I’m humbled.
how can i get you more props?
It may be too late to try and get this post up to the front page. I would suggest rec’ing and maybe messaging friends. Minis may help, but I think that has more to do with passing your eProps to help purchase premium/Life.
is this as important a post as i think it is?
I sure think so. But then I tend to think about every post I make being a very important post. As I told @jtrigsby in the comments above, I think there are some angles I present here that haven’t been discussed in the mainstream tech circles.
and WHY for the love of all that i know about W NT/95/atari tank battle am i kissing up here?
Because iPad CAN run Win 95?
I’m not really an Apple fan, the fruit yes. The computer, not really.
@ProfessorTom - You don’t feel that’s an oversimplification? I mean, I’m one of the bajillion people who bought one, and I didn’t buy it for that reason. If I extrapolate that the possibility exists that others also didn’t purchase it for that reason, it starts to minimize your argument. Furthermore, you’re now suggesting that because (as an example) YOU don’t own one, the reason may be that you’re not as smart as a two-year-old? See how that argument doesn’t really work?
In short, I think there’s far more to it than the “its so easy” claim.
@ehowton - You don’t feel that’s an oversimplification?
No. People want the path of least resistance. If it were all about what a device could do, Unix would be the desktop OS of choice. Sadly, it’s not.
@anaraug - There more I look at smartphones though, the more I think that Palm would the way to go for me.
Interesting, given that Palm is Preing for a Buyer.
I’ve heard nothing but praise for WebOS, but the market just doesn’t want it. Mobile is only happy when there are two OSes with a third pretender, not four plus.
I’m not saying that I’m against Android. What I am saying is that I think Apple has cornered a market here and even three years later industry experts are still scratching their heads and trying to figure out how to compete with Apple. It’s glorious and the consumer is benefiting…as much as they can while being tied to AT&T.
The problem with trying Open Source apps is you’ve got to convince people to buy an open source device first. This is the blessing and the curse of the closedness of the App Store. To me, Open Source’s strength is to create an App or product that doesn’t exists in the proprietary world of Apple’s App Store and somehow convince people that they’d rather have this Open Source app then the app from the App Store. But how does one do this? Bonus: How does one compete a free product to something that cost $2.99?
And so by the end of this comment, I’ve ended up with enough off-topic words for a post of my own
Yes, you should make a post.
By the GODS I hate adobe. They’re the ones who desensitized the average web user into thinking that it’s OK for websites to run code on your computer without any kind of security check first, let alone before asking your permission. But I’m aware that my opinion on this point would categorize me as a crank if I say it too loudly.
Despising Flash’s insecurity doesn’t make you a hater. It makes you smarter than all the rest. In all of the discussions of Flash not being allowed on iPhone, I have yet to hear this damned good argument. I think I’ll use it in a future column.
ow that I think about it, Chrome is a step in the right direction, running each tab in a separate thread.
Have you seen Apple’s take on one-upping Chrome?
@ProfessorTom - I disagree. That’s not the reason I bought a Touch, and it would be ignorant of me to assume I’m the only one in the world who didn’t buy it for that reason. Which means there are others. Maybe enough to make the majority?
@ehowton - I think statistically, one murder doesn’t equal a trend.
@ProfessorTom - Precisely. Just because you think the iPhone/Touch/iPad is easy to use doesn’t make it the reason everyone is buying it. Again, it would be ignorant of me to think I was the only one who knew exactly what I wanted and why, and not for the reasons you claim.
@ehowton - Granted. But I think it’s just as ignorant to ignore the “path of least resistance” that the iPhone/iTouch/iPad brings to the market.
@ProfessorTom Agreed! I wouldn’t think of doing so. I would just be very, very cautious of using absolutes.
@ProfessorTom - I hadn’t seen the new webkit stuff yet. What I’m really really wondering is if Mozilla will jump on the same bandwagon. (I still use firefox instead of chrome, mostly because I’m used to the behavior of certain addons, but i’m certain that someday I’ll switch. There are certain websites I have frequent issues with that the process-tab dealio might fix.)
I wonder if people consider flash insecurity a moot point because the iPhone is (or they think it is, I don’t know if it really is or not) already relatively secure.
And yes, I know that Palm isn’t doing the best financially. I know nothing of marketing and so on, so I won’t take any attempt at trying to explain it. My impression of WebOS is that of a neglected gem though.
I don’t know enough about how app stores work in general to tell you how to get an open-source app onto a closed-source device. Even if an app’s source was available, but only binaries approved by Apple were able to be installed, I still think this would be a huge advantage, not just for users (who would get more frequently updated apps), developers (who’d have some of their work done for them, possibly by free volunteers), and for Apple (whose boost in app quality and possibly quantity would sell more hardware). This might be possible with the way it is now… I really have no idea.
@anaraug - Palm totally botched their marketing of the Pre.
I wonder if people consider flash insecurity a moot point because the iPhone is (or they think it is, I don’t know if it really is or not) already relatively secure.
Only geeks think about that kind of thing. The average user just wants pretty and LOLcat videos to work.
Apple has to approve your inclusion in it’s App store. If you can’t get in there, I think you have to jailbreak the phone to install no AppStore apps. Furthermore, if you had to compile said apps, the only people who would deploy the open source apps are uber geeks which is definitely not the target market.
@ProfessorTom - But does Apple think about that kind of thing?
@anaraug - I’m sure they do. My guess is the reason they don’t want Flash on the iPhone is to keep battery use, processor use and heat to a minimum. Security was probably a distant second in this decision. You could always email Steve directly though: sjobs@apple.com.
This is a great, in-depth look at the main battlegrounds for working business models online these days and you couldn’t get better coverage.
No ads are the principal reason Texas and I went with wedsite for our wedding website (you can find it here) and I must admit, my preference would be for no ads, but depending on the service I wouldn’t want to pay for it.
I think ads, as long as they’re discrete and easily closed, then they’re OK. Like you highlighted, developers and companies need to gain funds to pay their bills. Capitalism at its finest!
I’m also impressed – that’s two in-depth, quality blogs in a short space of time! Awesome!
@cmdr_keen - You’re not the only one saying you’re impressed with my recent work. It’s like expectations were non-existent.
@ProfessorTom - Naw, I’m always expecting great things from you, it’s just a change to have a couple of substantial posts from you!
Keep up the awesome work!
Apple iPhone is the exclusive manufacturer, but the smartphone with Google Android operating system has many mobile phone manufacturer. A large number of varieties of phones and are available that use the Android operating system. The open environment is the driving force in this community all brands of phones. Developing an application for Android smartphone is fairly easy to platforms other smartphones. Sources and Android development tools are large and readily available. Strong community support is there to assist in programming.
Android apps development