For Advertisers iPhone is a Game Changer, Apple TV Isn't

Unless you live in Guam, you probably know by now that Apple announced its long anticipated iPhone and shipped the Apple TV extender. You can read about the devices on a bazillion other sites, but start with Engadget. Let's instead think about the impact for brand marketers.

The biggest news for advertisers is that the iPhone will bring advertising to mobile devices in a way that people will accept. The reason is that the device includes an embedded version of the Safari browser. This enables consumers to browse the full HTML versions of their favorite Web sites with ease and zoom in on the content. This content, of course, includes banner and search advertising. As you can see from the screen grab below, the ads that are on the New York Times Web site are browsable right on the device. The iPhone is a game changer in so many ways, but let's not overlook this one.

So what about the Apple TV? This product, although certainly exciting from a consumer POV, offers very little value for advertisers. The reason is that it's basically a media extender. It streams purchased content from the iTunes store onto a TV. And oh by the way, only in 720p, not 1080i high definition. And while this content can include video podcasts, it's not going to create more appeal for the channel among brand marketers.

As Scoble says, the Apple TV achieves parity with the XBox 360, which supports PC to TV streaming out of the box. As a new XBox 360 owner I have come to love this feature. My family loves viewing pictures on my big high defintion TV. The Apple TV does the same with content from the iTunes store, but it's not nearly as exciting as Sony putting Internet connectivity in every TV or as Microsoft turning the XBox into an IPTV receiver. (Microsoft is an Edelman client and we do work on the XBox business.)

So, if you're scoring at home, iPhone is going to have a huge impact on mobile marketing. Apple TV won't have the any kind of impact on TV advertising.

Tags: apple, iphone, appletv, macworld

Comments

[tim]

What? No impact!?

It's not a groundbreaking product, but didn't Apple just revolutionize TV distribution by selling episodes from 2 bucks ahead of everyone? Didn't they just sell 50 million of them? Didn't they just flip the switch on a highspeed wireless protocal that no one else is ready for yet? Didn't Apple just bring it's couch/livingroom "iPod-equivalent" to market and hasn't Apple been leading the transformation of broadcast transformation?

It's not a huge tech leap, but it certainly will change TV advertising.

(And, by the way, the XBox can act as a settop for IPTV, but still requires another box (so who care's when IPTV would otherwise be delivered in one box, not two (one of which you are expected to already own) and it's not known who or where the service will be offered. i.e. it's more vaporware.)

[Klaus]

Don't forget the iPhone will be a niche product with a price tag of $800. Something like the Nokia Communicator.

There are a lot of questions to answer, especially about the power consumption in real world scenarios, the touch screen experience when used as a phone,...

It also may look uncool and funny if you holding it to the ear.

I caught you Steve, you are just another Apple Fanboy ;-)

[William]

Um, take 2 seconds to read Apple's web page, it works with 1080i TVs, the thing is 720p is actually a higher resolution than 1080i so i don't know why you would ever want anything done in 1080i over 720p in the first place.

[Lani]

I dugg this, just cause you mentioned Guam, and at 9:00 am PST it would've been 2:00am - ouch

[gianandrea facchini]

well, klaus, you got another apple fanboy: me ;-)
i try to be serious now: the cost of the phone should be around half of your number, by the way still expensive versus other smartphone. but the cool factor which makes apple selling a truly expensive i-pod versus other mp3 readers should take over this issue.

[Howard Scott]

not a game changer? Steve, I think you're missing the point to a certain extent. In fact, I think you've got it the wrong way around. having banner ads on the iPhone isn't anything special - blackberry users and pocketPC users have had that for year and, at the end of the day, it doesn't do anything special - it's still a broadcast advertising medium splashing the same ad to everyone who visits the site without logging in and is fully dependent on the depth of adserving tech sitting behind the site.

Apple TV on the other hand has a built in personalistion engine from the word go - because (and I make an assumption here) you need to login to the iTunes store in order to purchase and hence stream content down to the box (disregarding the streaming from your own network) and so this means that, if they so wanted, apple could send you adverts related to your previous history or current viewing trend, even location based on credit card details, to your TV screen.

For me, this IS a game changer. internet on a phone? it's old hat.

[Klaus]

@William

1920x1080 = 2073600 / 2 = 1036800

1280x720 = 921600

1080i is virtually the same resolution as 720p. What looks better depends on the native resolution of your LCD TV, the quality of it's deinterlacer and the source format.

Maybe Steve wants to tell us he owns an expensive 1080p TV / Projector :-)

@gianandrea

The iPhone is $500/$600 with a contract (a high margin Apple Fanboy ripoff contract) which subsidizes the phone by another $200-$300.

[Mike Keliher]

Why wouldn't people in Guam have heard about this? :)

[David]

Does anyone know if/how well iTunes imports other video formats i.e. as downloaded from a BitTorrent client? I think that the Netgear product (http://gizmodo.com/gadgets/ces2007/netgear-bittorrent-partnership-streams-1080p-to-your-tv-226725.php) as an open system (in contrast to iTunes) may have far greater potential than Apple TV because it could be significantly easier to use with pirated content.

I don't think the 40+ year olds in charge here really understand that it is the P2P people who will decide what will win. According to some estimates cited by Morgan Stanley, video P2P sharing accounts for over 40% of all worldwide internet traffic. It's possible to download almost any movie or TV show ever made from BitTorrent for example - I know people who don't even subscribe to cable TV or rent/buy retail DVDs because they have 200+ disc libraries filled with stuff they've downloaded.

The Netgear product removes the hassle of burning a DVD-R to watch a pirated program on the living room TV. So in other words, marketing these products to P2P users seems like a smart move to me.

[B2BCurt]

Let's face it Steve. The Apple brand just got polished a little brighter yesterday.

Despite the outrageous price being asked, I have colleagues who are ready to plunk down the big bucks because they know it is from Apple, it will work and it will make them feel a little more self actualized.

The marketing ROI they're looking for is a little rich for my blood.

[gianandrea]

looking at klaus correct statement about price and to all the features the iphone has, i wonder if we are still talking about a phone or a real connectivity device. as stated by david pogue, the fact that it's a phone is the least part of the story. question is: are we tyalking about a phone? are we shortsighted?

[Christopher Penn, Financial Aid Podcast]

I have to disagree on AppleTV, Steve. It's putting iTunes content into the living room - which can be of great benefit for people who don't want to consume content at a Mac or PC. For example, my parents are thinking about getting a Mac mini. The Apple TV would be the perfect companion to bring new media to their couch, where they can enjoy it.

The catch is - you have got to have iTunes game as a new media marketer.

More here:

http://www.financialaidpodcast.com/2007/01/09/top-5-things-you-need-to-know-to-leverage-appletv-and-iphone-in-new-media/

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