Yeah, but Can the iPad Make Me Money?

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ipadmoney_smallADOTAS – Driven by the hype in the technical press, I visited Apple’s website and checked out the iPad video. Like all of Apple’s geek candy, the iPad looks great–sleek and slick. It demos as completely intuitive, with barely a learning curve needed.

The $499 price point seems a tad steep at first, but it’s cheap when compared to a MacBook. And oh, what the iPad can do…. It’s an e-book reader! It’s a music player! It’s a portable theater with a big enough screen that we old guys can see it! And if you want to talk internet, you can take it with you!

I want one.

But back to business, which in my case is crafting video-based direct response advertising for TV and the web. Where the mere rumor of a new Apple toy triggers giddy adoration, my industry’s direct response TV products are often targets of satire. But in the markets they compete, they’re game-changers too. People spend billions because these products perform functions that customers value.

To succeed, DRTV firms and Apple must both create products that fulfill unmet needs. And Apple — which in its early days was itself an infomercial client–pitches its products virtues as aggressively.

Can Advertising Piggyback on Apple’s Success?

For marketers, the iPad is a promising ad channel. We’ve clamored for a decade for a mobile advertising platform that delivers messages and response with trackable reliability. There’s considerable enthusiasm that the iPad may qualify.

Mobile ad network Transpera offers a representative take: “the sleek, portable device offers consumers a viewing experience that rivals a laptop with the intimacy and relevancy of the mobile phone…. the iPad can deliver Transpera’s ‘Peek’ pre-roll and post-roll video units, as well as Clickable interactive video ad units. ”

Of course, TV and the web do such things routinely. What’s new is doing it interactively on a mobile device.

Apple’s bandwagon is a good place to chill. The touch-screen based iPhone and its app-friendly software made cell phones high-functioning, and turned competitors into copycats. The ubiquitous iPod did nothing less than revolutionize music consumption — as well as inspire the iTunes store that today dominates music sales.

Based on that track record, it’s not unreasonable to project a similar arc for the iPad. Advertisers who get on board quickly could be poised for a long happy ride.

What does the iPad offer that the iPhone does not? In the immortal words of Lucy Van Pelt: real estate. iPad advertising enthusiasts believe the 9.7 inch screen will make video more visible. That’s particularly important in direct response television, where product demonstrations move the merchandise. Viewers are rarely impressed by what they can’t see, and you can’t see much detail on a two-inch telephone screen.

Because Apple is positioning the iPad as a portable web browser and media device, pundits predict a big flood of media apps–many already rolled out for the iPhone and iPod Touch. “Portable interactive internet television,” informitv calls it. Excellent! Wherever there’s TV, we usually see DR out in front of it.

From Those Wonderful Folks Who Brought You Apple TV

But as is so often the case on technology’s bleeding edge, “new” is not guaranteed useful. From an ad industry viewpoint, each iPad opportunity is balanced by a threat. While iPad TV apps could indeed be the best platform for mobile video advertising, app discovery remains sketchy at best. Customers have to find them, then install them. You won’t bump into “TV ads” just by tapping the on button.

Apple learned from the iPhone that marrying devices to service providers (AT&T in this case) limits its reach. So the iPad will launch “unlocked,” functional with any mobile data provider. But if you’re too far away from a wi-fi or an AT&T hotspot, you’ll need a pricey 3G subscription to benefit fully from the iPad’s obvious differentiator: big screen mobility.

Apple’s previous i-Marvels, both the iPod and the iPhone, prevent sensible people from dismissing the Pad. But redefining product categories — and industries — will be a far harder slog this time. As a DRTV-friendly platform, it will be tougher still.

According to Apple Insider, “some publishers are skeptical of Apple’s iPad business model, which sees the company giving 70 percent of revenue to content providers, but not sharing any personal information about subscribers.”

If that’s true, then I’m skeptical too. DRTV sales success depends heavily on data-driven targeting. If Apple withholds its customers’ information, we may as well jump back a generation and embrace CPM pricing. That may be okay for brand building and maintenance, but for not for moving products from the warehouse to customers.

The second strike against iPad as a video ad powerhouse is based on control of your content. For television, we can film what we want, and buy time where we want — directly — on many hundreds of stations and cable networks. Web advertising offers similar freedom — and thousands more media outlets — though we usually conduct ad buys through ad network middlemen.

If the Apple seers are correct and “the app” is the best method to deliver advertising on iPads, we inevitably must cede some control. It’s not a deal-breaker, of course — early iPad adopters will initially choose from 140,000 apps, so it’s not like Apple enforces an app gold standard — but Apple could seek a cut, or charge fees if it wants… or simply remove your app from its store. (In fairness, Apple has given no indication it plans to do such a thing, but it does like to control whatever variables it can.)

If there’s a third strike, it’s not one specific to DRTV — or even to advertising. It’s inherent to the product category Apple wants iPad to revolutionize, popularize and own. Apple’s iPods are easy to use, efficient and as portable as electronics get. A two-inch screen is a small price to pay for putting music, video, and the web in your pocket. You can put e-books there too (there’s an app for that, you know).

Apple’s MacBooks deliver high value also, including everything the iPod Touch does, plus marvelous applications suites on bigger hi-def displays. More to the point, MacBooks are already portable — though they do require much bigger totes.

Financially, the iPad differentiates itself from MacBooks by its much lower price ($499 vs. a minimum of $1199). Functionally, it separates itself from an iPod Touch chiefly by its screen size.

Then again, ever since Goldilocks started nosing around the homesteads of bears, there’s been big money in marketing different sizes. A Ford Focus gets you from Point A to Point B as successfully as an Expedition. But if the latter’s too big and the former’s too small, perhaps a mid-size sedan is just right. So let me be the first to suggest that the iPad is positioned to become the Ford Taurus of portable media devices.

But revolutionary? iPods pushed Sony’s Discmen off the radar because they delivered a better user experience. Not only were they smaller and easier to carry, by making room for a thousand more songs (or audiobook chapters or those funky new podcasts), your window of fresh entertainment was no longer limited to an 80 minute CD.

The iPad, conversely, embeds compromise — easier to carry than a Macbook, but more cumbersome than an iPod Touch. As an e-reader, the iPad’s bigger screen won’t deter portability: readers are accustomed to carrying around hardcovers with roughly equal dimensions — and the iPad is considerably thinner.

As a portable media device, though, the size is a bit awkward. Try to pocket it, and you risk looking like a fool with your pants on the ground. Price point not withstanding, why not just stick with a notebook for media consumption?

But most of us have learned not to second-guess Steve Job’s magical product design and marketing abilities. And many prognosticators insist the iPad will do for (or “to”) print what the iPod did for music: completely destroy and disrupt a century old industry. So will video advertising be a significant part of this new “print” model? We’re betting it will, and soon to dominate it.

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