Apple's iPad Raises Stakes on Rich Advertising and Branded Apps

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While techies and Apple fans assessed Apple's new iPad device yesterday, reaction from the advertising community fell somewhere between cautious optimism and utter awe. One thing appears certain, though: If enough consumers purchase the $499-and-up unit, the ante for apps will be raised.

"We'll have to see how it all pans out," said Ian Schafer, CEO of marketing agency Deep Focus. "But at the end of the day, it all depends on this thing being in lots of people's hands. If that happens, then there is a real impact to be made with this device."

In the coming weeks, brands with iPhone apps will decide if they simply want import those apps into the new 9.7-inch "multi-touch" device or optimize them for the bigger screen. While stopping short of prognosticating what brands will do in the near term, Ken Doctor, a Web analyst for Burlingame, CA-based research firm Outsell, suggested they will eventually embrace what he calls "a multi-touch landscape."

What that landscape will look like is up to the brands and designers that have only lately begun to experiment with the technology. According to Doctor, future experiences "will be everything from designing the car that you want to remodeling the house by the ability to bring in other elements, whether you are using a keypad or your fingers."

He added that advances in interface design will mean "you'll have the ability to not only see a car in green or blue as you have on the Web for some time, but you will be able to look inside the car."

Joe McCambley, a founder for the New York-based WonderFactory, spoke in loftier tones - representing, among other things, a blow to banner blindness.

"When the Web was growing up, you had that juxtaposition of banners and content competing with each other," he said. "I think now you are going to see a creative revolution in advertising. I think you are going to see advertising that actually helps people. They will get [conditioned] to the point that they will think of it more as a service."

The publishing industry - led by newspapers and magazines - is heavily invested in the iPad and products like it. Apple's device will leverage the iTunes store to enable book purchases and periodical subscriptions. The New York Times and MLB Advanced Media, the online arm of Major League Baseball, have already built iPad apps. Both were featured yesterday during Steve Jobs' presentation. Other publishers seem to have prepared in advance for Apple's product launch. Late last year, McCambley's agency helped create a test interface for tablet devices on behalf of Time Inc.'s Sports Illustrated.

Newspapers and magazines are crossing their collective fingers that the iPad's release marks a turning point in their digital fortunes -- marked in many cases by audience attrition and declining ad rates. They, and video/audio content distributors like MLB.com, see the device as not only a potential revenue boon, but also an avenue that will supply them with more viewer data and therefore more targeted/premium audience segments for advertisers.

However, Deep Focus's Schafer warned the device may resist tactics marketers have often exploited with Web content. For instance, the device won't handle Flash files - which are nearly ubiquitous in rich online advertising today.

"If people are going to be paying for content a la carte, they are going to be less tolerant of that content being ad-supported," Schafer said. "Odds are that the advertising is going to be relegated to the world of apps."

He also predicted that the device may have some negative consequences for publishers - especially regional and local ones. "This might actually put the squeeze on small publishers who don't have the resources to reinvent their entire Web publishing process," Schafer said.