iAd: hmm…

One thing I have enjoyed quite a bit thus far on my iPhone is the overall lack of advertising. Sure, a few apps have it but, for the most part, it is missing from the mix; until now. As with many issues that face us on the device, this one too splits me down the middle.

In this corner we have the fact that this device is an integral part of our business. We make these apps for clients who, in turn, require a profit in order to continue on. While some companies have made quite a splash selling products via the iPhone, most of our clients have seen their best ROI come in the form of brand equity. While this is harder to measure than how many units you have sold, right now anyway it certainly can set you apart from your competition. Making your product easier to find and interact with certainly is not a bad idea.

Apple has done a fantastic job of making money with their devices ever since the first iPod hit the stores. Once they had an iPod in everyone’s pocket, it was go time for how to make money on that. As a general non-scientific study I took a look around one car on the subway and noticed 11 folks with the now infamous white headphone cords. There were 7 more with headphones of varying types that I could not tell but my money is on them being attached to an iPod or iPhone as well. Let’s face it, tons of folks have these devices.

Now enter iPad. This opens up an entirely new demographic to the family. Even at that, this crowd is not now who they will be in a year once the communities who will best use the iPad have started to really develop. Recent number have ranged slightly but it looks like we have about 51M iPhones, 500k iPads, and about 35M iPod touch devices out there. Apple already has us buying our music, our apps, some subscriptions, and [they hope anyway] books from them so what’s next? Ads.

This could clearly be huge news for Apple. An additional 30% take on a new product is great when you have an audience and dangle a “you keep 60%” carrot out there to developers to push on their clients. It gives everyone a third option out there which is to offer the app free and take ad revenue. Apple’s purchase of Quattro will likely be how this trick is pulled off.

It is a good thing for clients to be sure. Otherwise free apps now have the opportunity to generate an income; albeit small. The big question I see is consumer tolerance for ads popping up everywhere. Personally I find solace in the knowledge that my iPhone is largely ad free. My $.99 should get me something right? All things considered I would rather pay for it. I am a frequent user of an app that tracks my bike rides. At the end of a ride, tired and just wanting to upload my ride, I am told about an opportunity to buy a sports drink. It will even find it for me. While I just ignore it I did find it a bit off putting that it suddenly showed up there.

We are collecting thoughts now on iAd and how it might work for our client’s businesses. Feel free to report here or come back to see what we find. This issue will surely re-surface soon…

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