Who should I work with?

Cameron Hulett, senior vice president, publisher solutions at Acceleration, provides his insights into Google, Apple and what the launch of the iPad means for publishers.

Monday, 15 February 2010

Publishers are increasingly searching for ways to make more money from their content in the rapidly evolving online space. As this happens, Google and Apple are doing their best to support publishers while making revenue for themselves.

However, each company is doing this differently. Google has made a move into the hardware market through Nexus One, and is trying to serve the mobile advertising industry in the same way it does the desktop Internet.

Apple, meanwhile, has moved in the other direction. No longer satisfied with dominating certain parts of the hardware market, it now has its sights set on mobile advertising and helping publishers to control their content through the launch of iPad and its content subscription-based model and stores.

But what does all this mean?

Google’s search advertising model is appealing

Google’s business model is to make money from search-related advertising. Its mission is to provide the most relevant and useful search results at a fee to marketers, advertisers and publishers. It supports publishers by helping them to serve display advertising to their sites, and by providing them with more visibility for their stories and advertisements within search rankings as a result of searches through its search engine.

However, it’s widely believed Google’s desktop search business is topping out, and beginning to slow down in the USA, and that the next space for it to conquer is mobile. The recent launch of the Nexus One smartphone supports this theory. As do the various business acquisitions it’s made. For example, it has acquired Ad Mob, a mobile display ad technology provider; Grand Central, a phone management service; and Google has been in talks with Yelp about acquiring the local business review site.

Coupled with all of this are rumours about how Google is developing the Chrome operating system to allow it to compete against the iPad. Imagine how compelling Google’s mobile offering could be for publishers if it controlled the user experience, the way ads are served and how people search for mobile content.

Apple’s subscription-based model offers control

But what about Apple? Although it does not have a search engine business, there’s no doubt it is trying to claim a share of available revenue from the mobile web. It also has mobile ad serving capabilities thanks to its purchase of Quattro Wireless, a direct competitor to Ad Mob. But this isn’t what’s getting publishers excited: it’s how the launch of the iPad and its subscription-based model will enable them to control and disseminate dynamic content and advertising to end-users.

Do I work with Google or Apple … or both?

There’s merit in working with both Google and Apple. Each publisher needs to evaluate which route is better for them. The best option might be a mixture of the two.

Publishers who choose to give content away for free might find it better to align with Google. It’s believed that Google searches provide greater visibility for publishers’ stories and ads this way. Although this ‘scatter-gun’ approach is not very well targeted, the potential reach is appealing – with the revenue for publishers coming from advertising that is often a soft sell for lower value content.

Apple’s model is better suited to controlling and distributing premium content. By using its stores – iTunes, the App Store and iBook Store – Apple can leverage users’ subscription information and provide publishers with useful data about the way people are receiving and responding to content and advertising. Being able to provide publishers with this kind of data is powerful and measurable. It’s likely this will attract higher-value publishers down the Apple route, but will require more premium repackaging of content.

One publisher that has already aligned with the iPad is the The New York Times, and more will follow. The way Sports Illustrated is considering using the iPad shows how the device could herald the delivery of more dynamic content to consumers. By designing material specifically for the iPad, Sports Illustrated can offer much more compelling, controllable and measurable packages to advertisers.

Conclusion

Publishers need to first understand the playing field and develop a strategy that enables them to take advantage of new mobile devices and ad serving technologies. At a minimum, this must include an awareness of how to repackage content to take advantage of the different platforms within the marketplace. There is a lot to consider, and plenty of potential to make money from mobile, so it makes sense to get prepared now.