Months after its release, with over 3 million units already sold, Apple's iPad was still eliciting excitement among consumers of all ages during a recent visit to an Apple store in West Nyack, NY. Such a high-level of consumer engagement combined with Apple's notorious reputation for tightly controlled user environments should have publishers and advertisers banging down Steve Jobs' door to get their content in front of all those users' i-balls. Anticipating this, Apple is pitching app sponsorship as an easy way for would-be advertisers to hop aboard the iPad locomotive, a ride complete with unlimited servings of marketing gravy in the dining car.
Oh by the way, the cost of a ticket to ride that train will run you a half-mil - that's right, $500,000 - according to Razorfish exec Domenic Venuto .
But it's not just the steep price tag for entry that's giving digital agencies and others pause. The real problem is Apple has put some policies in place aimed at shutting out its main competitor, Google, which also prevent publishers and advertisers from taking full advantage of the iPad community. As Venuto puts it:
" ...as a media opportunity, the iPad is untested and almost entirely un-trackable. By banning apps from transmitting data to third parties, Steve Jobs clearly does not want the iPad to become a traditional direct response medium filled with fat-belly ads. His hope is that this policy will suck the lifeblood out of ad networks, namely Google’s AdMob, which rely on data inputs and analysis for their survival. "
When Venuto talks about banning apps from transmitting to third parties he means this little section of the privacy rules that all App Store developers must agree to. It requires that data collected and transmitted about user behaviors be very narrow:The collection, use or disclosure is necessary in order to provide a service or function that is directly relevant to the use of the Application. For example, without Apple’s prior written consent, You may not use third party analytics software in Your Application to collect and send device data to a third party for aggregation, processing, or analysis.
This doesn't totally lock AdMob out of the App Store and the iPad, but it does prevent it from gathering the targeting data that is at the core of Google's ad business, you know, the context for the contextual ads.
Problem is, targeting AdMob and other networks also makes it impossible for all other advertisers to determine the actual, real value of that half-million dollar iPad ad. And for now, Apple's attitude seems to be "so what? This train's leaving the station, either show your ticket or get off and walk."
Allowing hype and buzz to be the sole factors driving ad pricing works to Apple's advantage for now, but when the public's attention inevitably moves on to the Next Big Thing, so will advertisers unless a rational, results-driven pricing model emerges.