Monday, May 17, 2010

From single-sponsor to enhanced ads, publishers use different approaches to advertising in their iPad apps

Just over a month into the lifespan of tablet publishing and three models are being used for advertising inside iPad news apps: exact copy, single-sponsor, and enhanced content.

The exact copy approach is being used where publishers are asking third party vendors to reproduce their publications for the iPad, without changes, and rarely with added content. Zinio, for magazines, and PressReader, for newspapers, are examples of companies that are providing good services for publishers where the exact copy approach is being taken (for the most part).
The single-sponsor approach was used immediately by the New York Times when they launched their initial iPad app back on April 3rd -- in this case, Chase Sapphire.

The iPad app from the Financial Times
uses a single-sponsor approach
. →

The solution makes sense when the publisher wants to recoup some development costs, or reward an advertiser. The advantage, of course, is that it buys the developer time, and allows the sales staff to show off the app to prospective clients.

As I wrote this morning, the Financial Times is using this approach with their app. While the app is free to download the content will eventually be accessible only to paid subscribers. The publisher, however, is allowing limited free access to content and crediting their sponsor, Hublot, for the access. After July content will be behind a paywall, but will all advertising disappear?

The Sporting News is using Zinio to bring their previously online-only daily sports newspaper Sporting News Today to the iPad. Previously free, the daily now will cost readers 99 cents a day, or $2.99 a month. In my interview with publisher Jeff Price, he reinforced the reasons for the single-sponsor solution and said they are having excellent meetings with advertising prospects pitching the new paid product.

Coors Light is the single-sponsor of the Sporting News Today app.

Because Price is using Zinio to provide iPad access, it is hard to tell what the reader response is to a paid subscription model with advertising -- even if it is a single-sponsor. Many paid apps that contain advertising have been criticized for the practice. This is probably an unreasonable expectation from readers, though. A 99 cent single copy, or $2.99 subscription is hardly enough to pay the bills -- advertising is absolutely necessary to keep reader costs down.

On the other hand, with a more expensive subscription model, like that employed by the Wall Street Journal, and soon by the Financial Times, iPad users may prove more sensitive to the combination of paid content and advertising. Currently the WSJ is getting hammered in iTunes because of problems with their app. Others, however, continue to complain about the Murdoch paper's approach to the iPad. So while the app is the third most popular free news app, users continue to question the paper's pricing policies.

The third approach is best exemplified by the Vanity Fair app TNM looked at last week. The app actually takes two approaches at the same time: the landscape reader mode duplicates the print edition, with some added content, but no interactive advertising. Using the app in portrait mode, however, is a different experience. Not only is the editorial designed specifically for the tablet, but the advertising contains embedded links to video and the like.

For the Condé Nast book, making sure their new iPad app contained enhanced advertising took some time and effort. No wonder then that the title decided to wait until the June issue to roll out its iPad app. The result is that the sales staff has an excellent presentation tool -- the app itself -- and now use this to  convince additional advertisers of the value of adding multimedia to its advertising palette.

Vanity Fair's iPad: Ads that appear in portrait mode have embedded video.

When Apple implements its own mobile advertising strategy with iAd a fourth approach may be viable. This would involve advertising that has no relationship at all to the print edition and is specifically designed for the tablet. Apple will most likely unveil new details about iAd at its developer conference in early June, where it is expected to also officially unveil its newest version of the iPhone.