Apple iPad Launch - Publishers Trial Advertising and Subscription

author/source: Miles Galliford

Apple iPad Launch - Publishers Trial Advertising and Subscription

As Apple prepares for the iPad to hit the streets of America, traditional publishers have been hard at work putting the finishing touches to their early iPad Apps.

As with their online strategies there appears to be no consensus about which business model will work. As this extract from the Online Publishers Association illustrates, we are likely to see a lot of experimentation over the next six months, including advertising, sponsorship, affiliate, subscription and one-off sales using micropayments. These are very interesting times for both content creators and content consumers.

"Major magazine publishers might not have access to an actual Apple iPad before its debut, but that hasn't stopped them from developing apps -- and selling big-ticket ads. According to the New York Times' Stephanie Clifford, ads on those iPad apps are in the $75,000 to $300,000 range covering a few months. One advertiser, FedEx, bought ad space on apps from Reuters, WSJ and Newsweek, while Chase Sapphire bought out New York Times' app ad space for the first 60 days. Some advertisers were complaining about the high price of ads on a non-existent device, and were in some cases forced to buy print ads to get entree onto the iPad. Clifford notes that there have been stumbling blocks in ad sales because no one knows how many iPads will be sold, how many apps downloaded, and how many ads will be viewed. "We’ve got to figure out what the measurements are," Time Inc.'s Mark Ford told the Times. Plus, most digital ads use Flash, a technology that won't run on the iPad, meaning advertisers have to expend more resources for custom ads. 

Meanwhile, publishers are also feeling around for the right pricing model for apps and digital issues. The Wall Street Journal could charge $17.99 per month for its iPad app, about half the price of its print price, and much more than its digital edition. The Journal reported that Men's Health magazine would charge $4.99 per issue on the iPad (the same as its print cover price), while Esquire could sell an advertisement-free issue for $2.99 each, which is $2 less than the newsstand price. Why all the excitement for magazine publishers? As print loses some appeal and web and mobile ads don't quite deliver revenues or pizzazz, publishers think advertisers will be wowed by the possibilities on iPad apps. "Some of the things you can do are just mind blowing," FedEx's Steve Pacheco told the Journal. "You are taking something that used to be flat on a page and making it interactive and have it jump off the page." Despite the excitement, Apple is still having trouble striking deals for TV content and digital newspapers for the iPad. The sticking points are pricing and control, the Journal reported".