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Will Apple's iPhone 5 boost mobile advertising with bigger screen?

iphone

Mobile advertising on the rise

Apple's new iPhone 5 promises to give a boost to the company’s mobile advertising business by potentially putting the smartphone in more consumer hands and giving advertisers a larger screen for which to create.

With no major surprises coming out of Apple’s news event yesterday, the focus was on the iPhone 5’s new larger screen measuring 4 inches and support for 4G LTE – two features that have been available on Android phones for some time. There were also some dashed hopes as Apple failed to announce an embedded NFC chip for the iPhone 5, which had been expected by some.

“You could say the bigger screen is kind of a defensive move,” said Noah Elkin, principal analyst at eMarketer, New York.

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“Up until now, Apple has been stubborn about sticking with a 3.5 inch screen but growing competition from Android has effectively made the industry standard a larger screen,” he said. “As a result, Apple felt some pressure to expand its screen.

“The bigger screen is a bigger, better palette for marketers. The potential is there for interesting tie-ins for marketers.”

The creative canvas
Marketers face an ongoing challenge in mobile to deliver compelling consumer experiences given the small screen sizes on smartphones.

While previous iPhones have a 3.5 inch screen, the bigger screen of the iPhone 5 could open new possibilities for marketers.

“Our studies have shown that full-screen ads are five times more effective than banner ads and expanding the creative canvas on the iPhone 5 is a big advantage to marketers who are looking to deliver an engaging experience to their target customers,” Kurt Hawks, general manager of Greystripe, San Francisco.

The larger screen is not all good news, as app developers will need to update their apps so they do not appear letterboxed on the iPhone 5.

Building for the different screen size will cause a 15 percent increase in time for developers while building for the iPhone’s higher resolution will cause a 12 percent increase in time for developers, according to Velti.

The support for faster 4G LTE mobile networks means marketers will be able to deliver richer content experiences to users.

“With the iPhone 5’s LTE connectivity, the new device will allow retailers to provide shoppers with more and richer content, such as mobile Web video, while they are in the store, not only enhancing their singular shopping experience, but their overall experience with the brand,” said Alex Campbell, co-founder and chief innovation office of Vibes, Chicago, IL.

Driving content consumption
The iPhone 5 also comes with other features such as more microphones that could help drive content consumption levels for users.

Smartphone users are increasingly accessing their devices to consume a variety of content and the iPhone 5 will support these activities in several ways.

“The iPhone 5 launch is very exciting for Shazam as its new features move the needle for digital content lovers,” said Andrew Fisher, CEO of Shazam. “With features such as a larger 4-inch retina display, faster processing, and an increased number of microphones for better input, it’s clear that the iPhone 5 will continue the Apple media powerhouse legacy.

“For Shazam fans, these new features lend themselves to richer second-screen engagement with all forms of digital media, including music and video,” he said.

Another important development for marketers to come out of yesterday’s announcement is new pricing for older iPhone models, which has the potential to put iPhones in more consumer hands and expand the reachable audience of marketers advertising on Apple’s iAd platform.

The iPhone 4 with 8GB will now be offered for free with a contract while the price for the iPhone 4S drops to $100.

“There are still are going to be a lot of people who will take the two-year old device for free over another device because they want the Apple experience,” eMarketer’s Mr. Elkin said.

“This will put a lot more devices in the market,” he said. “The more iOS devices there are out there, the more of a value proposition for Apple advertising there is.”

No NFC
There was some expectation that Apple would embed an NFC chip in the new iPhone but this did not happen.

With NFC as a mobile payment method facing growing competition from other mobile payment solutions in the United States, the technology’s availability on an iPhone would have exposed it to a lot of enthusiastic mobile users and could helped drive further adoption.

“We are not surprised we didn’t see an NFC chip in the new iPhone,” Vibes’ Mr. Campbell said. “Adoption of NFC is nearly nonexistent and mobile payments have yet to take off.

“For marketers, Passbook will offer brands the opportunity to be front and center with the consumers they are trying to reach,” he said. “Imagine walking by a store and having a coupon for 20 percent off pop up – a very powerful tool for marketers.

The new iPhone 5 is thinner and lighter than previous versions, at 7.6 mm thick and weighing 20 percent less than the iPhone 4S.

It also features more color saturation a longer-lasting battery.

It will be available in black and white versions for $200 and 16GB, $300 for 32GB and $400 for 64GB. The iPhone 5 ships Sept. 21.

Apple is partnering with AT&T, Verizon and Sprint to offer the new iPhone 5.

The iPhone 5 will come with the latest iOS 6 software from Apple, which was revealed a couple of months ago. Features include new mapping functionality and the Passbook app, which brings together a user’s loyalty cards, tickets and coupons in one location.

“New iOS 6 features like Passbook, Maps and deep integration with Facebook, as well as the larger screen on iPhone 5 mean it’s more important than ever for organizations to have a mobile platform that supports new functionality and form factors on Day 1,” said Sophie Vu, senior director of global marketing at Kony, Orlando, FL.

“We all know smartphones and tablets are replacing desktops as a leading mobile channel, and consumers have come to expect a high-quality experience and a flawless transition, regardless of OS or device.

“Our customers are incredibly interested in the new iOS 6 features, especially Passbook - we expect Passbook will be a game-changer in getting consumers to adopt mobile wallets.”

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

 
Related content: Manufacturers, iPhone 5, Apple, eMarketer, Noah Elkin, Greystripe, Kurt Hawks, Vibes, Alex Campbell, Shazam, Andrew Fisher, Kony, Sophie Vu, mobile marketing, mobile

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Comments on "Will Apple's iPhone 5 boost mobile advertising with bigger screen? "

  1. rob davies says:

    September 13, 2012 at 12:15pm

    It's telling that the absence of NFC on the new iPhone 5 hasn't been much of a surprise to those of us who have observed Apple's progress in this area. But is that really going to obstruct the march of NFC? I don't think so.

    The vast investment in NFC mobile contactless payments and services is not going to wane. And with the NFC-enabled Android, Windows 8 and RIM handsets dominating the smartphone market are we going to see clear water emerge between them and the iPhone? NFC is going to progress at a pace without Apple. This could be Apple’s loss.

    Global brands such as MasterCard, Visa, Barclaycard, Orange and Google have committed, and will continue to commit. millions of dollars on developing NFC capabilities. With Apple’s eschewing of NFC, the other major brands now have a real opportunity to differentiate their offering and challenge the mantle for leadership in the innovation race.

    Apple is taking a different route with mobile contactless payments at the moment and that's fine but it does mean that iPhone users will miss out on one of the other big benefits of NFC which is the ability to interact with marketing campaigns that use NFC tags embedded in posters and product packaging. It will be this sort of activity that will initially drive the use and demand for NFC services before payments take off as mainstream.
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