The fact that I have to point this out before mentioning what I’m hearing is next from Apple shows how much we doubt the skills of CEO Steve Jobs in the media industry. I think most of us give Jobs his just dues in manufacturing digital products.
I never forget that Jobs is getting bigger than the record labels. He invented Pixar Animation which allowed him to ultimately sell to Disney and become its biggest shareholder at the same time.
So you know where I am coming from on this -- Jobs is about to pull a maneuver that publishers, television and radio had best bone up on.
Mobile ads or as I will call them, iAds.
It’s part Jobs dislike of Google, the proven Internet search ad leader and part smart business because Jobs has platforms he has created that can be monetized.
Didn’t media executives use to think this way?
The new ad platform will be introduced this week -- April 7th to advertisers who have been all abuzz.
As a matter of background, Apple purchased a company called Quattro, a mobile advertising developer for nearly $300 million in January. Apple didn’t buy the company for no reason.
This is war.
Apple vs. Google.
Android vs iPhone.
But media interests could be the collateral damage here.
Google spent $750 million to acquire AdMob.
The scene is now set.
Mobile advertising according to Magna, a metric in that industry, is only expected to do $331 million in 2010 and a bit over $400 million in 2011. But the promise of mobile advertising as a growth industry is what started this war.
So what’s Apple up to?
- As you know, with Apple you never really find out until Steve Jobs speaks. But there are always indications and some of them are enticing. Apple could target ads to mobile consumers based on where they live, where they are at any given moment. This type of hit them where they are approach could be a tantalizing advantage for mobile advertising. After all, in the past, radio was a good way to reach mobile customers in their cars or on portable radios. Now, the possibilities to access customers who are in the neighborhood or in the mood to buy is too irresistible to pass up.
- A giant Google-Apple lawsuit could ensue as Google owns the patent on the kind of technology that would make this type of mobile ad serving possible. Apple could lose.
- But Apple has a patent on technology that could control ads served on just about any screen connected to its expanding operating system that could -- believe it or not -- turn either the content or application off if the user isn’t observing the ads. It’s hard to say if Apple would adopt such a hard core approach but they own the technology and can work with it.
There are answers.
Like, start making content for the mobile space as I’ve been saying for years. Not recycled terrestrial radio content but new initiatives. As a content provider, radio will have a way to cooperate with the inevitable move to mobile advertising.
But if mobile advertising takes off as I am expecting it to do, the clear winners will be Apple and Google because they own the technology just as radio stations controlled the means for delivering content and commercials through radios manufactured by others.
The big change -- the manufacturers, in this case, are also becoming the content providers and exclusive conduits for mobile advertising.
This is going to be very significant and will greatly impact traditional media and radio.
You saw what happened when radio interests got into the technology business.
HD radio.
Extra channels that cost money to run and don't produce significant revenue streams. . HD radio took forever to develop. Several manufacturers fought like cats and dogs and the technology was delivered to the marketplace too late.
Either the radio industry has to get into manufacturing and find the next Steve Jobs or stick to someone else’s platform.
Terrestrial radio is a good business although not a growing business. There are still years of profitability left. But a growth business is the mobile Internet and if you look around none of the major radio companies are committing any real money to it. It is as if they believe consumers will still be listening to 24/7 radio broadcasts in an increasingly on-demand and mobile world.
Therefore, it begs the same question that never seems to get answered.
When is the terrestrial radio business going to reinvent itself for the mobile Internet?
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