I just finished Walter Isaacson’s biography of Steve Jobs. If you haven’t already done the same, get on it.
One of my favorite scenes is the description of Bono visiting Jobs at his Palo Alto home in 2004 to pitch him on including U2′s soon-to-release new single in the next iPod commercial.
Superstar musicians normally charge enormous fees to companies that want to associate a hit song with a product, if they’ll rent out their songs at all. Microsoft, for example, paid the Rolling Stones $10 million to use “Start Me Up” in commercials launching its new operating-system software, Windows 95. It’s kind of incredible, then, that a tech company’s brand had become stronger, cooler and more accessible than one of the best-selling rock bands of all time — so much so that the band licensed its single to Apple free of charge. It’s even more impressive that the band was U2, who, according to Rolling Stone, were especially reluctant to partner with corporate sponsors.
In their twenty-five-year history, U2 have never licensed their music for commercial use or even accepted tour sponsorship. With radio playlists strictly formatted and MTV showing more reality-TV shows than videos [however], many bands are looking for new ways to bring their music to the public. And so U2 launched the first single from their upcoming album, How to Dismantle an Atomic Bomb, with an iPod ad rather than a video.
Given that another iPod spot (in 2006) helped Bob Dylan debut his new album, Modern Times, in the #1 position on Billboard’s chart — something he hadn’t done in 30 years — you have to credit Bono with his prescience. Clearly he’s no marketing slouch either.
According to data from Nielsen, smartphones outsold feature phones among US buyers in May — for the first time ever. While Android is the leading OS (38% of smartphones versus 27% owning iPhones), Android’s marketshare has flattened among new buyers. Over the past 3 months the percentage of smartphone buyers buy iPhones has jumped from 10% to 17%.
Would you have guessed that Chevy spends more than Ford or Toyota? Or that Macy’s spends more than Target? Other rankings that surprised me: Arm & Hammer spends more than Gatorade, Kia spends more than Volkswagen, and Ashley Furniture spends more than Ikea.
Check out this great infographic that ranks the top 200 brands by the size of their 2009 and 2010 ad budgets.
The top two in each category (first, second):
Auto: Chevy, Ford
Retail: Walmart, Macy’s
Apparel: Skechers, Nike
Telecom: AT&T, Verizon
Restaurants: McDonald’s, Subway
Food and Beverage: Coke, Campbell
Beer: Budweiser, Miller
Cleaning Products: Tide, Clorox
Financial Services: American Express, Chase
Beauty and Personal Care: L’Oreal Paris, Olay
Insurance: Geico, Progressive
Consumer Electronics: Microsoft, Apple
Media: DirecTV, Dish Network
Drugs: Lipitor, Cialis
Google has been inserting ads in iPhone maps for a few months. I spotted my first one yesterday.
I’m guessing I should blame ATT for the frozen incomplete map above (it never loaded more that this), but I was annoyed that delivering the ad got higher priority than delivering my map. And for that I blame Google and Apple. Perhaps the map failure had nothing to do with the extra load of serving ads — but until the mobile map feature is highly reliable in San Francisco, Google and Apple should sequence the serve calls so that the ads load only after the map loads.
On the relevance front, I’ll give Google a C+. True, I was driving a car across the SOMA district of San Francisco, where Firestone Complete Auto is located. But I gave Google a few hints that I wasn’t on the market for automotive service at the time, and it ignored them. First, I didn’t search for automotive service. Second, I did search for a driving directions for a business a few miles from my current location — which suggests my car was running fine at the time.
According to research conducted by Keynote, US mobile phone users prefer browsing their way to favorite websites rather than downloading an app version of the site that’s been optimized for the mobile-phone experience. The only categories where mobile users prefer apps over the standard browser experience are social media (namely Facebook and Twitter), games and music services.
The findings bring me back to 1999, when websites were obsessed with building-client app or browser-extension versions of themselves, only to realize that web users mostly opted to skip the download-and-install process in favor of browsing, bookmarking or searching for content by way of an upstart called Google. As eMarketer suggests, this data will disappoint sites that were hoping to use apps to snatch up permanent real-estate in a smartphone land grab:
“These preferences may surprise mobile experts who consider apps to offer the best content and shopping experiences. And marketers may be frustrated as well; getting an app on a user’s home screen is a constant reminder of the brand, but it doesn’t make sense to offer an app users don’t want.”
Interesting implications, too, for Apple’s iAds, the business unit dedicated to creating in-application advertising that, like the apps themselves, is designed exclusively for the smartphone experience. Maybe the naysayers are right.
“Since launching its iAd mobile advertising service on July 1, Apple has been slow to roll it out. Of the 17 launch partners Apple named for iAd, only Unilever PLC and Nissan Co. had iAd campaigns for much of July. Of the remaining 17, Citigroup Inc., Walt Disney Co. and J.C. Penney Co. — which tied its campaign to the back-to-school-season — have since launched iAd campaigns and other companies are planning iAd efforts.”
I dunno. Clearly the iAds approach is ruffling feathers up and down the ranks of the existing advertising military-industrial complex, especially the agencies. Those agency leaders have power to blackball campaigns destined for iAds — right now. But maybe Apple is betting that, by inserting itself deeply in the creative process, it can replace the agencies entirely.
“Roger Fidler, head of digital publishing at the Donald W. Reynolds Journalism Institute in Columbia, Mo., said Apple probably will take a 30 percent cut of all subscriptions sold through the company’s online App Store, and as much as 40 percent of the advertising revenue from publications’ apps.”
Wait, can I change the above headline? It sounded expensive when I first read the article, and then I thought about it. Take a look at the budgets of print and online magazines: The big costs are sales, marketing, collections, IT, paper and printing, etc. The editorial function usually represents less than a quarter of the total expense budget. Same is true for newspapers. Outsourcing 75% of the costs in exchange for 30-40% of the revenues — that has to increase profitability, right?
As I write this, I’m looking out the window at a crane that’s installing a cellphone tower on our roof. Our newest rent-paying neighbor is moving in upstairs. Digg (like Verizon or Sprint, as of today) leases space from the SF Bay Guardian, a free ad-supported weekly paper that is, I gather, very eager to find any new channels to increased profitability.
One thing that’s made me a fan of Apple’s iAds approach is its focus on building a mobile advertising experience for brands wanting *create* demand in mobile environments, rather than a platform that allows retailers and direct-response marketers harvest demand that was created elsewhere (the Google approach). As mobile advertising matures, brand advertising and DR advertising will both be elements of the winning model. But in these early days, as the the big players — namely Apple and Google — are establishing their ad products and their reputations, I’m wondering if it’s a good move for Apple to open the floodgates to mobile banners from app developers pitching you on their $0.99 downloadable products. When advertisers optimize for click-through and conversion-to-immediate-sale, the banners tend to favor jarring colors and annoying tactics to fool us into clicking — not beautiful ads that enhance the experience, like Superbowl commercials that are more fun to watch than the game. According to the Business Insider,
“the new iAd for Developers program is Apple’s way of getting more (albeit cheaper) ads in its system to fill its inventory glut, while also moving more app downloads through its App Store, and helping the developers who run its ads in their apps make a little more money. A potential win-win-win, if it works out.”
In the inaugural post at his eponymous blog, my colleague Bob Buch suggests Apple’s vertically-integrated approach to business and not-integrated-enough approach to mobile advertising may limit its initial success.
“After launching DiggAds, I’ve become convinced that the future of advertising will be to integrate ads into the user experience of the site. This doesn’t mean just sticking them in the middle of the page, it means including the functionality of the site within the ad itself — essentially, transforming ads into content. Examples of this include DiggAds, Facebook’s social ads, Twitter’s new Promoted Tweets product, and of course, Google AdWords. I was disappointed that Apple did not follow this model.”
More thoughts on the battle between Apple and Google for mobile ads.