Advertisers Show Interest in iPad

Advertisers Show Interest in iPad
By STEPHANIE CLIFFORD
Copyright by The New York Times
Published: March 24, 2010
http://www.nytimes.com/2010/03/25/business/media/25ipad.html?th&emc=th


Advertisers initially approached new media as if they were going duck hunting, tiptoeing cautiously into the waters of mobile phones and the Internet.

With the iPad, it’s big-game season.

Getting ready for the April 3 iPad introduction, FedEx has bought advertising space on the iPad applications from Reuters, The Wall Street Journal and Newsweek. Chase Sapphire, a credit card for the high-end market, has bought out The New York Times’s iPad advertising units for 60 days after the introduction.

Advertisers including Unilever, Toyota Motor, Korean Air and Fidelity have booked space on Time’s iPad application. In a draft press release, The Journal said a subscription to its app would cost $17.99 a month, and the first advertisers included Capital One, Buick, Oracle, iShares and FedEx.

At least initially, it should provide a nice boost for publishers. iPad advertisements on print publishers’ applications cost $75,000 to $300,000 for a few months with some exclusivity, said Phuc Truong, managing director of Mobext U.S., a mobile-marketing unit at Havas Digital.

But after the initial buzz around the iPad fades, so, too, might advertisers’ enthusiasm, with questions still swirling around how to price ads and how they will look on the iPad.

Some early advertisers hope to catch the tailwinds of the Apple marketing program.

“There is an appetite to be associated with the inevitable buzz — the buzz around the iPad has been so long-lived,” said Alisa Bowen, senior vice president and head of consumer publishing at Thomson Reuters.

FedEx, which will run ads on publisher applications for 90 days after the introduction, said Apple’s history of big product campaigns was part of the appeal.

“Part of being first,” said Steve Pacheco, director of advertising and marketing communications at FedEx, “is to be included in their in-store demos, to be a real-life example of a powerful brand going to market in a new way.” FedEx will be the exclusive advertiser on the Reuters and Newsweek apps for 90 days after their introduction.

After the initial promotion, though, advertisers may raise harder questions.

For one, pricing is a major sticking point between advertisers and publishers. Even at the end of last year, when the iPad was still a rumor, advertisers were arguing for cheaper ad prices on tablets than in print.

“It should, hopefully, lower the cost, because it’s a lot easier for us to create it electronically, and put it in an electronic book, than it is to print it,” said Steve Sturm, then a vice president at Toyota Motor North America, in a December interview. (He has since left the company.)

But publishers are pushing for higher prices than in print and have not come up with standard ways of charging for ads. “Some are doing it as a fixed fee, others are saying, ‘Hey, we’ll sell you up to X number of impressions for Y dollars,’ ” said Max Mead, vice president for business development at PointRoll, an ad technology company working on iPad ad formats.

Advertisers are used to paying based on the number of times their ad is seen online and on mobile devices, or on the circulation of a print magazine. No one knows how popular the iPad will be. There have been just under 200,000 preorders for it, said Gene Munster, an analyst at Piper Jaffray. But even assuming that a single application is near-ubiquitous on the iPad, that is still a fraction of the audience an advertiser would reach with an ad on, say, “Dancing With the Stars.”

For now, publications like Reuters, People and Time are charging flat fees. That will go on “for some time, until the download statistics become clear and usage reaches some kind of predictable pattern,” Ms. Bowen of Reuters said.

“Marketers are really excited about it, but they don’t yet know what type of volume they’re getting,” Mr. Mead said. “Nobody has any visibility.”

There is also confusion over other ways to measure the success of an iPad ad.

“We’ve got to figure out what the measurements are,” said Mark Ford, president of the Time Inc. News Group, which includes Time and Sports Illustrated. (Time is planning an app for the April 3 introduction, while Sports Illustrated’s is expected to be ready in June.) “It’s not how you measure print, it’s not, certainly, how you measure digital. It’s going to be something different.”

Fran Pessagno, director of operations at the media agency OMD, a unit of the Omnicom Media Group that is working on the FedEx tablet project, said he would be looking for firm results. “With everything we do, we’re just going to have to test it and see whether or not it actually results in new account signups,” he said, referring to accounts created with FedEx. “Until anything goes to market, it’s always viewed through the lens of, ‘it’s short term.’ ”

Another challenge is technology. Many online ads, especially those with moving images, use Flash, which the iPad does not handle. So advertisers must find other ways to enlivening their ads. People, for instance, is using the Adobe program InDesign to create slide shows, videos and animation.

“It’s a little more work for them, and for us, too,” said Fran Hauser, the president of digital for the Time Inc. Style and Entertainment Group, which includes People. (People’s iPad version is expected to be ready by early August.)

And while advertisers know the basics of iPad ad formats, they do not know everything: How will an ad look on a page, for instance? What kind of ad unit will most appeal to customers?

“There’s still a lot of questions about how developers are going to be building their apps and how we can create the best ad units for them,” said Nicole Leverich, a spokeswoman for AdMob, the mobile-advertising network that Google is acquiring. AdMob is not releasing software that will let developers run ads on apps “until we can test our ad units on a physical device,” said Mike Fyall, manager of product marketing, in an e- mail message.

Mr. Ford said that while advertiser interest had been intense, “we’re all learning.”

“It’s a moving target,” he said.

Brad Stone and Jenna Wortham contributed reporting.