Tuesday, June 5, 2012

Apple & maps: another chance to kick start its ad efforts; media companies would be better off to create new ad opportunities rather than trying to force buying of the old

We are getting close to the start of Apple's annual Worldwide Developers Conference (WWDC) and the inevitable barrage of rumors have started. One of the most persistant is that Apple will unveil its own map solution, dumping Google Maps. It may seem like a minor thing to many, but the ramifications are tremendous.

If Apple decides to dump Google's solution it will not only cost the search giant money, but it will force Google to create its own app in order to get back in with iOS users. For Apple, owning the map app will be an opportunity to expand on the map experience.

Google Maps attracts
paid mobile ads.
It is important to keep in mind just how important maps are to Google's ad strategy. The purchase of Zagat has brought in valuable content that can be monetized through mobile advertising when it is combined with geolocation services. The loss of iPhone and iPad customers will reduce somewhat the mobile audience.

Meanwhile, Apple has also been trying, somewhat haphazardly, to compete in the mobile ad space. It has not be pretty to see Apple flail about. But location based advertising could be just what the doctor ordered, a chance to entice advertising through the maps app.

The bad news for publishers, I suppose, would be if Apple were to succeed. Newspapers, in particular, have created an enormous opening for companies like Google to steal their local advertisers. The folks behind AOL-owned Patch no doubt saw how little resistance old media companies were creating and jumped in, as well. In 2008, with the creation of third party apps for the iPhone, newspapers were given a second chance. By creating new digital products, such as location aware advertising, old media companies could offer their local advertisers a good reason to spend their digital ad dollars with their old newspaper partners. That, of course, did not happen.

The good news for publishers, though, is that I have my doubts that Apple will succeed in this area – it doesn't appear to be in their DNA. Instead, as this post in the WSJ speculates, Apple will probably use their own in-house mapping solution to create new features tied to location services, thus continuing to give potential buyers of their iOS devices another reason to buy Apple. With the iPhone using Google Maps, what is the differentiation between an iPhone and an Android phone in this area? Now there might be.

But Apple has to do this (mapping) right – the stakes will be high. Google Maps is a killer app – one that could be way better, that is for sure – but killer nonetheless. If an inferior solution is introduced, say one that is not as accurate, then Apple will have instead created an opportunity for the Android platform.

But where does this leave local publishers? Google wants to expand their reach into local advertising, as does hyper local web news sites, and here we have Apple possibly entering the mapping solutions game. I would say it leaves them exactly where they have been since 2008, with the opportunity to gain local ad dollars through new digital products, products tied to location services. The only thing stopping them is their resistance to launching new digital products that could, in any way, compete with print. Maybe now that so many newspapers have lost so much local ad dollars that light bulb will go on and they may realize that new digital products would not be competing with their print products but with Google and others.