Will Apple’s tablet — to be unveiled today — bring back the 20th Century for publishers and advertisers? Carl Howe, an analyst for Yankee Group Research, Inc., believes the much-anticipated e-reader device may indeed have that kind of impact.
“I think it is going to revive the traditional periodical ad model,” he said. “The space on the front page will cost more than space on Page 23. And yes, I think there will be pages. I really think they are going to try to use the same model that’s worked so well in print and translate it to a digital device.”
Howe stated that the tablet’s chief existing competition — Amazon’s Kindle device — doesn’t serve digital ads in a fashion akin to a traditional newspaper or magazine layout. “If you get The New York Times in a Kindle, you don’t get a lot of ads and it’s formatted completely differently,” he said. “[The Apple tablet] is an attempt to reproduce the print experience in a much more easily recognizable way.”
The tablet, rumored to be dubbed “iPad” or “iSlate,” will certainly garner the attention of publishers and marketers. Yet, uncertainties abound for the device. For newspapers, magazines, video-based entertainment entities, and advertisers, the questions begin with the one of reach.
“If I’m on a bus and there’s no WiFi available, does that mean I am going to need a 3G [wireless network]?” asked Allen Weiner, an analyst for the research firm Gartner. “And if so, how are they going to deliver that? I think the bandwidth issue is a horizontal one that impacts all of the other issues.”
One of those other issues is whether or not Apple’s tablet will provide a user experience worth paying for. Such a result could be a revenue boon to publishers, while providing them with more viewer data and therefore more targeted audience segments for advertisers.
However, Weiner said, “I’m not sure if a subscription model, even in this new venue, is going to work effectively. So there really needs to be an ad plug.”
Howe disagreed about subscriptions, adding that the iTunes model will make the paid infrastructure very doable. “This is two revenue streams for publishers, not just one,” he said. “[Publishers] intend to charge subscriptions.”
Weiner believes the video-side ad model will be different than Hulu’s model, which gives Hulu the right to sell some ad inventory on partner content from NBC, Fox, ABC, and various cable channels. Apple’s iTunes already offers dozens of TV shows in a fee-based system, giving the tablet a preexisting ordering engine to build on.
“I think you are going to see paid content and ad-supported content,” Weiner said. “And if you go on the theory that Apple will take a multi-device strategy and allow streaming video content to iPhones, iPod Touches, the tablet, and Apple TV, that presents a powerful scenario for video-related advertising.”
Eric Bader, an executive with the mobile agency BrandInHand and a ClickZ columnist, characterized the tablet as a big development for players in his niche. “Ultimately I think the tablet is going to take all the good improvements that have come to mobile advertising in the last couple of years and amp them up with better visuals, more convergence, and new ways for brands to interact with consumers,” he said.
Bader said that Apple’s purchase of mobile ad network Quattro Wireless earlier this month was likely “unrelated to the timing or impetus for launching the tablet, but turned out to be a good move for Apple. They will certainly put the capabilities they acquired to good use in making the tablet a rich advertising environment for brand marketers, partners, developers, publishers and, of course, for Apple.”
Meanwhile, another emerging e-reader expected to come to market this year is the Hearst-backed “Skiff.” The product was previewed at the CES show in Las Vegas earlier this month and will reportedly place ads within the text of newspaper and magazine stories.
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