Archives for posts with tag: Apple

Note: This is part of a multi-part post about advertising. See “All About Advertising” for the start of the series, and for links to the other parts.

Type 2: “Coca-Cola” advertising

“Coca-Cola” advertising shows the brand, typically in a fairly passive way. The idea is not so much to sell to you right now but to influence your buying decision at a later date/later time. The way that they do that is by creating some brand recognition.

Some really good examples are Coca-Cola, Apple, and McDonalds.

In its best form, this kind of advertising persuades you, for example, that you don’t want a drink, you want Coke; you don’t want a phone, you want an iPhone; you don’t want some food, you want McDonald’s.

Then, when you finally get into the purchasing mode, and actually go out and buy this thing that you want, instead of looking at other options you go straight to this product that you have already decided to buy, and all you’ll really be looking for are variations within the product: do you want an iPhone 5S, or an iPhone 5C, or an iPhone 4S; do you want a black one or a white one, and so on?

Another way it works is that it’s there to create brand awareness for things you might buy infrequently. For example, if you have never flown to Warsaw and may not have heard of Baltic Air but if you see ads for them and then you go and search for flights to to Warsaw then Baltic air would come up you would say, “I don’t know any of these others but I recognise this one I’ll go with them.” That’s the second-best form of this advertising working.

The important thing with this is that it’s not trying to persuade you to buy now, so they’re not looking for click-throughs, they’re looking for displays, i.e. Banner advertising, not links. They don’t really expect you to take any action right now.

Some other examples of this type of advertising are: sports-team sponsorships, business-name signs outside premises, logos on clothing, etc.

Advertisements

In the PC era, everyone (except Apple) ran the same operating system (OS) and, therefore, the same software. So PC manufacturers could only differentiate themselves based on one or more of: hardware specs, price, etc.*

This mentality has carried over into the smartphone (and, now, tablet) arena. However, these areas are different from the PC world because these devices don’t all run the same OS, and, therefore, don’t all run the same software. It’s actually the software that people want; it’s the software that allows people to do what they want, whether it’s update their status on Facebook, check their mail, play Angry Birds, or whatever.

This is why app stores are so important, and why attracting developers to write software for a particular OS is so important.

Apple obviously gets it; they should, they’ve been here before. The other phone manufacturers don’t, perhaps because they weren’t competing on software in the “feature phone” era. And the PC manufacturers, such as Dell, HP and Lenovo, that are trying to compete in this area, still seem to be operating as if the OS/software combination was available to all.

Maybe HP, with their acquisition of Palm, gets it too.

As for Microsoft and Google? Google thinks it is in Microsoft’s PC position, and Microsoft thinks it should be, and one day will be.

But no-one is likely to end up with a Microsoft-like share of the smartphone/tablet/ebook/music player market. The general consensus seems to be that three or four OSs will share domination for the foreseeable future.

* Ok, not all PCs ran the same software—there were minimum specs for the newest software at any one time—but you know what I mean.

With the release of Safari 5, Apple has added two very interesting things, Reader and extensions, both of which directly attack Google’s main (some would say only) business – web-based advertising.

Firstly, Reader. Reader allows you to read online articles in a continuous, clutter-free view, much like the javascript utility Readability. Reader places an icon prominently in the Address Bar which, when pressed, displays just the text of the article, nicely formatted, in a scrollable “page” overlaid in front of the original page, which it blackens out to de-emphasise it.

As Apple themselves say, “Reader removes annoying ads and other visual distractions from online articles.” [Emphasis added] How does this affect Google? By presenting articles in this way, readers effectively don’t get to see ads and, if they don’t see the ads, they won’t click on them. No clicks equals no money for Google. (As an aside, no clicks also equals no money for Bing or Yahoo, but I think they’re just collateral damage. As for the site’s publisher, who is also affected by this, I’ll get to that in a moment.)

The second thing Apple did was allow third parties to write extensions to Safari. Based on the most popular extensions to other browsers such as Firefox and Chrome, I would expect that two of the more popular extensions will be ad blockers and Flash blockers. (There is already an excellent Flash blocker, ClicktoFlash, for Safari, but I expect that either it or new Flash blockers will be written using the new extension API.) I am sure that Apple is not shedding any tears at the prospect of more people blocking Flash in Safari.

So, adding support for extensions will surely have the same effect as Reader – it will reduce the number of ads being displayed, and therefore clicked on, on web sites seen with Safari – but will be more generalised (i.e. not just article-type pages).

Is this really an “attack”?

Apple must know the effects that both these decisions will have on Google’s ability to effectively display ads, and to monetise the ads that do get displayed. What makes it particularly interesting, though, is that neither is strictly necessary.

You could argue that adding extensions is just bringing Safari up to parity with Firefox, Chrome and IE, all of which have had extensions for a long time. But extensions are a convenience, not a necessity, in a browser; Safari could have continued on without them. There has not been any kind of push recently to have them included in Safari, so it really is Apple’s choice to include them.

Reader is even more of an obvious attack. Readability gives much the same functionality and, as it is a javascript applet, it already worked with earlier versions of Safari. No other browser offers similar functionality out of the box. The decision to make and include it, especially so prominently, is, therefore, a direct attack on Google’s cash cow, in much the same way that Google Docs is a direct attack by Google on Microsoft’s cash cow in MS Office.

The object of the exercise seems to be to reduce the amount of money Google makes. The collateral damage to Microsoft and Yahoo is really of no concern to Apple at all.

But what about web publishers, many of whom rely on ad clicks for revenue? Fortunately (from Apple’s perspective), there are two ways web publishers can still earn money for their work:

  1. They can make an app and sell it on the App Store, and make money directly from sales; or
  2. They can make an app and give it away for free through the App Store, and make money from ads embedded in the app. These ads will, of course, not be affected by the changes to Safari. Publishers can choose Apple’s iAds, or any other ad distribution network, such as Google’s AdMob.

If Apple really is going after Google’s sources of money, though, I’d expect to see some change(s) that would hamstring AdMob. Other ad distribution networks, such as  Millennial Media, AOL/Platform-A’s Third Screen Media , Microsoft’s MSN Ad Network and Jumptap may or may not be collateral damage from any such change but, again, I don’t see Apple shedding any tears about that.

What Now?

Apple has several successful business: its Mac business, iPods and iTunes, the iPhone and its App Store, and now the iPad. Each of these generate significant revenues for Apple, and each faces already-intense competition. It would be hard for Google to attack any of these businesses in a way that existing competitors haven’t.

Google, though, really has only one significant revenue stream, online advertising. Its foray into Android was meant to secure it a foothold for advertising on mobile devices, so that revenue stream would continue on what will undoubtedly be the next major platform for computing – the “next big thing,” if you will.

If we take Steve Jobs at his word and that the relationship between Apple and Google was fine until, “We did not enter the search business. [Google] entered the phone business,” well, Google might end up regretting its decision, and might find to its dismay that it has bitten off more than it can chew.

[Update]: Apple has announced changes to their analytics rules that do, indeed, hamstring AdMob (and MSN Ad Network)