Whether you're a gadget junky like me, or just due for a new phone, chances are you've read about the new iPhone 5. While many blogs have been debating form over features, one topic that has been scantly discussed is how the new iPhone 5 and iOS 6 is going to change the future of mobile advertising. For the sake of brevity, I won't list all of the features you'll find in the new operating system, however I will highlight the improvements that are going to change the mobile advertising ecosystem for publishers and consumers.
Let's start with the obvious...
(1) More Space Means More Ad Real Estate
App developers are so desperate to monetize their applications many of them have been cramming an ad unit down our throats even when it's an impediment to the content. With an extra 1/2 inch of screen real estate in the new iPhone 5, this means developers don't need to lay the ad over the content, instead there's a new found space for the mobile ad unit that's less annoying than it's predecessor.
Not only will developers welcome the space within their applications, search engines like Google and Bing will probably take advantage of this extra room as well. We've seen paid ads dominate the search results on desktops in Google for a while now. First it started as sidebar ads - then one, and then 2 - now a substantial part of the screen above the fold is dedicated to ads.
“Bigger screen translates to more real estate available for ads, making mobile ads more likely,” says Michael Pachter, managing director of equity research at Wedbush Securities.
(2) YouTube Cuts The Cord, The Rise of Mobile Video
If you haven't yet heard, Apple and Google are at war and one of the casualties in that battle has been YouTube. YouTube isn't about to wave their white flag. They've prepared a new app immediately for the release of iOS 6, but they've done so with one major addition. In the past, YouTube was restricted by Apple from including mobile ads in their videos, now that they've broken free from the App store shackles they can open this market. The addition of pre-roll advertising before popular YouTube videos on a mobile devices, is a big win for YouTube. They may walk away from this fight with a smaller installed base, but they will invariably increase their revenue by exercising their freedom.
(3) Facebook, Facebook, and More Facebook
Facebook is moving to prime time billing in iOS 6. They're tightly integrating with major features in iOS 6. This is going to be a big win for Facebook, who in the passed has struggled with their own mobile presence. Now Facebook can rely on the health of the iOS 6 interface to leverage more sharing and more mobile engagement from their users. When Twitter was given the same treatment, their signups increased by 25%.
Assuming Facebook gets the same lift Twitter has, there's going to be a swath of new advertising opportunities made available by this improvement. The social graph will grow, people will be more connected, and Facebook will serve more relevant mobile and desktop ads.
But third party applications will also ride this Facebook wave. TechCrunch reported back in May that third party application developers are leveraging Facebook data to serve more targeted advertising and their stock is bouncing after making that reality more clear. This move hints at Facebook creating a mobile ad network and eager developers want in. While that move might be several months away, Facebook is in fact extending their knowledge about you to developers so the ads you see can have more context and greater click through rates. This could change the mobile advertising industry permanently.
(4) In-App Purchases Became a Developers Gravy Train
In app purchases of iTunes content just got a whole lot easier. Previously, if Pandora wanted to sell you the song you were listening to right now, one would need to leave the application and open the iTunes music store. Thereby interrupting your jam, taking you away from the music, and forcing you into a purchasing flow. Now, developers like Pandora have the ability to keep users within their application to purchase their desired content.
The ability to have a seamless experience within an application and still monetize is likely to be an lucrative opportunity for application developers. I'm excited to see how this gets rolled out in the first wave of unique iOS 6 applications.
(5) Passbook Could Be a Boon for Couponing and Loyalty Programs
Ok, so there's no NFC on the iPhone… boo, hiss! We get it. However, what Apple did have the smarts to do was introduce an alternative and made it available to all of the legacy hardware they have floating out there. It's called Passbook.
Passbook could be a flash in the pan, or it could change couponing and loyalty campaigns permanently. I'm not sure where I stand yet. What I do know is that Apple has lined up a whole host of launch partners and that's a good sign for the platform.
This means Starbucks can now send me a gift certificate or coupon that I can load into Passbook. The next time I walk through the door of Starbucks my phone will buzz and the coupon will pop up. In a single swipe I have the barcode ready for the barista and I'm on my way. No more dealing with gift cards, coupons to print out, or any other arcane method of doing business.
The ability for the coupon code to pop up on your phone even if you merely walk by Starbucks could be great advertising opportunity for businesses. If I'm Starbucks, I'm sending every iOS 6 user a free coupon to put in their Passbook just to test the theory.
(6) New App Store U/X
More than 30 billion applications have been downloaded from the App Store but with recent changes in iOS 6, we can assume the rate of application consumption will rise.
Currently when you purchase or download a free application you're taken out of the App store. With a new change in iOS 6, you'll stay in the App store most likely consumer more content, researching new apps, and making more purchases. This tiny change in user experience and work flow will certainly be a big win for developers and those relying on the mobile app economy to pay their bills.
(7) Do Not Track - 'nuff said
The mobile advertising industry is very young comparative to the web advertising industry. What that means is historically users have had very little control about what developers know about their usage habits. There was no way to opt out of retargeting, clear your cookies, or otherwise prevent apps from passing along targeting information to their constituents.
The new iOS 6 is forcing developers away from tracking user behavior using the UDID to a new method called identifierForAdvertising (IFA). In short this is a more mature format that makes the mobile environment operate more like the desktop environment–that is, giving the user the ability to opt out of tracking, retargeting, and what amounts to the equivalent to clearing you cookies.
(8) Smarter Notifications Mean More Notifications
With more applications wanting the ability to notify users with an urgent ping, it can be a bit overwhelming. In iOS 6, Apple works to reign in some of the more overzealous apps by putting more control in the users hands. The new operating system allows a user to put time restrictions on when applications can 'bother' them. A byproduct of this feature could mean that more users will be increasingly comfortable with leaving notifications on for applications which could increase engagement, impressions, and ultimately revenue.
(9) Happy Developers
While consumers blogs are debating whether the iPhone lives up to the hype, developer blogs are cheering the new changes in the operating system. Overall, there's been an unprecedented control of the native applications such as the camera. For the first time Apple is letting developers have access to a new set of API calls that will lead to a whole host of new innovations. Imagine Instagram filters being able to adjust the aperture of a picture before it's taken. Now it's possible.
Another thing developers will welcome is smart application banners. Have you ever visited a mobile website only to be presented with a banner asking you to download their ‘iPhone Application’. Now developers can add some code that notifies the user that a mobile site has a registered app in the App store.
These are just 9 of the major improvements in iOS 6 and iPhone 5 that could alter the future of mobile advertising. The changes will be subtle enough that the user will not notice. But just like any good change in design, these changes will make for interactions with less friction, more activity, and in the end more revenue for the mobile advertising industry.
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