Watch Out Ad-Based Digital Signage!

Over the past few months, I’ve written two articles (Mobile Marketing and Its Impact on Digital Signage and Mobile Marketing and Digital Signage) that are focused on the implications that emerging mobile marketing trends could have on digital signage. In those articles, I postulated that Google’s recent purchase (or should I say pending purchase) of Admob and Apple’s purchase of Quattro Wireless were events that would likely change the face of mobile marketing forever. It was my position that these events would cause ad dollars to gravitate to mobile at unprecedented rates, which would subsequently threaten the viability of ad-based digital signage networks. Well. . . last week Apple announced the first fruits of their Quattro acquisition, and it far exceeded my expectations.

Last week during a preview of OS 4, Apple’s newest operating system for the iPhone and iPod Touch, Steve Jobs introduced “iAd.” iAd is both a feature and a service that allows app developers to easily integrate ads into their applications. Apple sells the ads, the app developers insert ads, the apps are rendered when clicked on by the user and both the developer and Apple make money in the process — the developers 60% and Apple 40%. While this is in itself not revolutionary, what is revolutionary is how Apple has redefined mobile advertising.

Traditionally, app-based mobile advertising relies on banners that are inserted into apps. When the mobile user clicks on a banner, the banner typically links out of the app into a mobile web site where the ad information is subsequently displayed. The downside of this approach is that the user leaves their app and may not be able to easily return to the same spot. As Steve Jobs suggested, this model ultimately reduces click-thru rates. What Apple has done has been to turn the ad into an interactive multimedia experience that is embedded within the application itself.

Apple has in essence turned the ad into an application within an application. When the user clicks on an iAd, a seamless transition from the app to the ad occurs and a truly engaging multimedia and interactive experience is presented to the application user. The ad can be composed of videos, product catalogs, maps, shopping lists, etc. — all of which are integrated into a common user experience. When the user is finished looking at the ad, they can seamlessly transition back to the app at the point at which they left it.

Just as Apple has created an integrated ecosystem for selling and delivering hyper-engaging content to mobile devices, they have now delivered an integrated ecosystem for selling, creating and delivering hyper-engaging ad’s. Not only will advertisers now have easy access to the 85 million iPhone/iTouch users, they will also be able to do it in a way that is both convenient and compelling to the end-user. When advertisers can now do this, plus receive detailed analytics on user engagement, why would they spend their money on something else? This is the problem that digital signage network operators will face as advanced mobile technologies become more common place. The name of the game will be to learn how to compete in this environment.

Click here to view Steve Job’s presentation of iAd.

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