Sunday, May 30, 2010

Travels With My iPad

Like some fair portion of the world - well, to be accurate, my professional world - I've wanted to see how the new category of tablet devices (okay, let's be frank, it's a category of one) travel.

Yeah, I know, I'm the one traveling, and the iPad is my accompaniment. I left the laptop at home.

How'd it go? Pretty well. As both a work device and a leisure aid, the iPad acquitted itself with aplomb. Of course, I was prepared for its limitations and didn't expect too much - which is good, because there's much about this contraption that is not intuitive. My gut tells me that one day we'll look back on the iPad as the Model T of tablets: radically transformative, but also quite quaint.

Now, on to some hopefully helpful tales, told and typed from the terrace of my room at the Hotel Playa Sol in Cadaques, in the northeast corner of Catalonia.

The purpose of my trip was to facilitate a brainstorming session at the global management meeting of the great, London-headquartered creative agency BBH. (That's co-founder John Hegarty, whom I first met at an ad awards judging nearly two decades ago, to the right, above.) After that, I had the IAB Europe Interact Congress in Barcelona. In between, I had five days to kill. I considered flying back to the U.S. ... for about five minutes, after which common sense compelled me to spend the down time exploring parts of Spain's Costa Brava.

I bought my iPad on the first day it went on sale, so it doesn't have 3G capability. I did not intend to use it to give presentations - although I find it's excellent CPR that purpose, at least in a one-on-one setting. But I did need it for basic utilitarian purposes: to review (not compose) Powerpoints, store maps and other important travel and work documents, read, write, email, network. And blog, I guess. The hotels I'd selected all had WiFi - maddeningly, the expensive business hotels all charge exorbitantly for it, while my lovely, reasonably priced vacation hotel here in Cadaques offers it for free. So I assumed 3G would be unnecessary. I was right, but I had both my iPhone and Blackberry, in case of data emergencies.

I also brought the small Apple wireless keyboard. But I'll tell you: For a practiced journalistic typist like me - which is to say, a deployer of two to six fingers at a time - the keyboard proved somewhat superfluous. I'm typing this lying on my back in bed with the iPad propped on my knees in landscape mode.

An important early discovery was Goodreader, for which tip I have to thank Jason Klein of the Newspaper National Network. It's a superb document reader. For a traveler, it allows the construction of a terrific atlas. Just make your maps in Google maps, save them as PDFs in Firefox, then load them into Goodreader. Not only is this more customized than any paper map, but it fits far more easily in your hand while driving.

Apple has been touting the iPad as a new kind of media consumption device, and it is, in spades. In my hotels, in Starbucks, at the WiFi-included The Only Running Footman pub in London's Mayfair section (seen above, through a glass, darkly) I had an easy time keeping up with The Times, the Journal, Facebook, business email, and Tweetdeck, which on the 'Pad is as close to a new form of media as I've seen - the socially-edited publication.

Yes, Netflix streaming is cool as hell, too, but not overseas; the service's contracts with studios and distributors allow it to stream movies only inside the United States. But Apple's iTunes store is open for business, regardless of where you are. I assume Amazon is there for you, too, but I loaded all my movies and books ahead of time. I haven't watched any of the movies, though; I'm loving the iPad as a reader. I could never cotton to the Kindle, but I find myself poring through novels (on this trip, Theodore Dreiser's "The Financier") on the 'Pad. It's not great for reading while lazing by the pool in full sun - but we shouldn't be sitting in full sun now, should we, hmmm?

Sorry for sounding like a nanny there, but the iPad does that to you. At every turn is a reminder that Apple knows what's better for you than you do. Like Flash - the high cholesterol of Apple's world. It's bad for you, says the device maker, so we don't offer it. Problem is, the lack of Flash support really limits the 'Pad's utility as a Web surfing device. When trying to review in advance Catalonia hotel and restaurant options on a two-and-a-half hour journey on a WiFi-equipped bus, I found the 'Pad almost useless: Virtually all these retail sites had significant portions built in Flash. It's all well and good for Apple to wax on about the virtues of HTML5, but I wonder how many small retailers in southern Spain are going to rebuild their sites any time soon because of this ideological dispute. The lack of multitasking is also a major annoyance; throughout the trip, I found myself constantly shutting down applications to do a quick Google search, and then reopening the previous app to continue with my business.

Also (and this isn't really Apple's fault, although as the hands-on master of the iTunes App Store it must bear some responsibility) most apps simply aren't fully intuitive, and almost none come with good documentation. Given how much more expensive most iPad apps are than the iPhone's impulse buys, one's desire for better documentation is high. Working in Goodreader, BlogPress and other apps required frequent shutdowns in order to hunt Google for tips and tricks. And I still can't figure out whether BlogPress will allow me to center, boldface or italicize text (or spellcheck) as I can do on Blogger on my grownup Mac.

Much of the iPad, in fact, strikes me as forced infantilism. I spent one day in London meeting with Guy Phillipson and his remarkable senior team at IAB UK (shown above). We discussed the latest developments in digital video, social media, and many other things that simply aren't fully accessible on the 'Pad. Why not? It almost seems as if Apple is saying: Forget the past 15 years. Forget all the habits you've built as a user. Forget hyperlinking - for the most part, you can't seem to cross from app to app. (Venture capitalist Fred Wilson just blogged about this, but I cant link to him.) Forget socialism; very few apps make room for conversation. Forget your short attention span, your frantic multitasking, your need to know now and fix it now and publish it now. The iPad represents the opposite of those old Burger King commercials. Instead of "have it your way," it's "do it our way." Or don't dare do it at all.

This all makes me postulate that as the Model T of tablets (you can have it in any color, so long as it's black) will have to be supplanted by a more Alfred Sloan-like approach (a device for every purse and purpose), and we'll soon see more newfangled tabs that allow us to do what we want to do. For now, one lives with workarounds.

And truth to tell, it's not so bad.

I figured out I could email photos from my iPhone to myself, save them on the iPad, and upload them in BlogPress. (Or so I think - we'll soon know.) This will do until a more fully featured blog editor comes along. I'm frustrated that The New York Times app won't let me tweet stories ... but I'm emailing them a lot more than I used to, because I'm reading - really reading - them a lot more than I used to. I expect Microsoft will release app versions of its Office suite, but until then, I'm even struggling through learning Keynote. I don't want to; as good as it is, I spent too many years perfecting my Powerpoint skills to want to bother to absorb yet another storyboarding application. But I can see how these tablets will make life just a little bit easier - and lighten the load on my back.

But let's not dwell on such things here in Catalonia. Here, in the home port of Salvador Dali -

- let's celebrate instead real creativity.

And laud the ideas we can hatch, rather than the applications we hatch them with.

And the sun and the sea.

And the catch of the day.

And art that lives.

And wine and tapas.

And the meeting of the minds...

... Here in Catalonia...

... On the terrace of the Hotel Playa Sol.

- Posted using BlogPress from my iPad

Location:Carrer de Pianc,CadaquƩs,Spain

Tuesday, January 12, 2010

The iPad's Threat to Advertising

I'm less interested in the Apple iPad and the spate of other interactive tablet devices about to flood into the consumer marketplace than in what they represent: another in a long line of attempts to semi-privatize the Internet.

Most "device revolutions" fail. For every iPod there are scores of Nomad Jukeboxes (of which I was a proud and happy early adopter). But this new revolution just might succeed, because it's not about the devices; it's about the consumer behavior impelling their invention. And it's that real - or presumed - consumer behavior that's generating a proliferation of not-so-secret gardens on the Web, many of them device-based - a phenomenon Forrester's Josh Bernoff calls the "Splinternet." Don't look now, but your television, telephone, radio, TiVo, cable box, and even your desktop PC are or are about to become gated intranets - with significant implications for marketers, media and agencies.

The biggest issue is complexity - the bogeyman that has haunted marketing and advertising from the dawn of the ad-supported Web. Publishers are waxing hopeful that the iPad will resolve the challenges that have seen their businesses sundered; weeks before its launch, The New York Times's David Carr even labeled Apple's device a "savior," arguing that it "represents an opportunity to renew the romance between printed material and consumer." Yet it's that very romantic impulse that should serve as warning that a pre-nup is needed, for without continuing, concerted, cross-industry commitment to managing transactional complexity in the marketing-media supply chain, the iPad and its ilk might only make publishers' problems worse.

Portal Period

The semi-privatization of the Internet has been creeping up on us for a long time - almost as long as the Web has existed, in fact, and so-called portals attempted to become the controlling influence over consumers' surfing habits. The portal period is generally considered a failure -- sort of the Paleozoic Era of the Internet -- but that's unfair. Rather, the first decade-and-a-half of the Web's gestation were largely about its proliferation and diversity, with consumers seeking navigation through an unfamiliar maze. That made search engines more valuable than portals.

But the walled gardens have always been there, and they've been growing in influence. What are Facebook and Twitter, after all, if not gated communities, built on Internet Protocol (IP), that live within the confines of the larger Web? While they're generously forgiving fenced neighborhoods (anyone can move in, regardless of race, creed, color, or brand preference), they are walled gardens nonetheless. They have their own rules and regulations, codes of conduct, behaviors, mannerisms and lingo. To identify them with the vague techie term "platforms" obscures what they really are: private communities, like cooperative apartment buildings in the big city. They allow you access to the larger, opportunity-laden and riskier world outside, but you'll always have your safe haven to return to.

Changing metaphors, if the Web is a "cesspool," as Google CEO Eric Schmidt has famously put it, maybe these are country club swimming pools - bacteria-free places to swim with your own kind. But - and this is important - however removed these country clubs were from the cesspools, they were still part of the larger town. The waste water still flowed to the same place. The kids may have been richer and snootier than you, but they went to the local public school. The same has been true with the Web's country club pools - until now.

Although the new IP-fueled devices promise to infuse interactivity into the last remaining analog nooks and crannies of our daily lives, the communities guarded by them threaten to upend that earlier, comfortable symbiosis. These devices and their proprietors have the ability to lock the community gates much tighter - or, at least, make the community so self-contained that any impulse to leave is restrained. They take the dogma that still guides so many digerati - "information wants to be free" - and reveal it as little more than a silly, thoughtless mantra.

Amazon's World

While the iPhone, with its "apps economy,", is the readiest example of these device-based walled gardens, Amazon's Kindle may be a better one. The iPhone, after all, still hints at the larger world - and the larger World Wide Web; the iPad, which some first-day critics labeled "just a big iPod Touch," is even more directly a creature of the Web. The Kindle, although IP-based, is utterly removed from it. Indeed, Amazon's walled garden for literati is more akin to a company town, with everything from access to product offerings to pricing tightly managed. Even the famously controlling Apple was moved to promote its relative benevolence to the media industry, noting that the iPad will offer book publishers and readers a choice of two price points, in contrast to the (lower) one required in Kindletown.

In fact, Apple has been a paragon of openness, compared with such other walled gardens as Sony's Playstation and Microsoft's xBox. True, the music industry has complained bitterly about how Apple's pricing policy for music and forced unbundling upset the financial requirements of the major recording companies. But at the same time, I can get virtually any type of music - regardless of codec, seller, or price - onto my iPod. (To this day, I have vastly more tunes there acquired from eMusic than from the Apple Store.)

More and more, "degree of openness" is looking to be a - perhaps the - central strategic differentiator among the different walled gardens of the Web. My favorite new gated community - Netflix Streaming - is fairly closed. Although it's accessible through numerous network devices (it comes through brilliantly on my TiVo HD), its offerings are solely those Netflix makes available - one reason I believe Netflix will become a financing powerhouse in Hollywood and among independent producers before too long.

Another favorite of mine, Boxee (which I access on my 46"-inch Samsung through the ATVFlash package of Apple TV hacks), is reasonably open. It offers widgets for scores of online video purveyors, and looks like it wants to be a remote control and organizing tool for as much digital video content as exists. (Boxee's ongoing tussle with Hulu is evidence of the "openness" contests beginning to shake up the digital video marketplace.)

Open TV

Boxee, which has announced imminent plans to release a proprietary set-top box, may even be setting itself up in direct opposition to the television set manufacturers that are bringing to market network-connected HDTV's with apps built directly into the screens, in what look to be totally closed systems. This is an issue I expect Boxee CEO Avner Ronen will address in his keynote presentation next month at the IAB Annual Leadership Meeting.

"Degree of openness" is, as I suggested, a strategic decision companies will have to make. There's no morality attached to it, the information-wants-to-be-free crowd notwithstanding. Some companies will thrive by remaining as porous as possible, while others will succeed by locking their gates. Consider Citigroup analyst Mark Mahaney's recent research note on Netflix:

We believe that NFLX is benefiting from a materially improved all-in product offering with a) improved DVD-By-Mail delivery service, b) expanded Streaming selection (17,000+ titles), and c) materially improved user interfaces via gaming devices (xBox, PS3) and Web-integrated CE devices and TVs. The ongoing shuttering of DVD rental stores is also helping. And the end result is higher customer satisfaction (reduced churn) and deeper competitive moats. Add all this to a increasingly efficient biz model (rising Gross Margins), and you’ve got an Internet Core Holding.

"Deeper competitive moats" are something that, inevitably, marketers, advertisers and media will need to learn to cross. The iPad won't necessarily get them to the other side. Far from being their savior, it could turn out to be a version of Charon, ferrying them across the River Styx to Hades.

Seamless Scale

I'm not even thinking about the obvious calculations - such as, how strictly will Apple set the terms and conditions, including pricing and customer-data control, for publishers seeking to sell their goods onto the iPad? A much more serious question is this: How fragmented will the advertising supply chain become? In deeply practical terms, if you work in advertising,your future depends on how companies like Apple intend to answer that question.

Put simply, a company's opportunity to create, sell and use advertising effectively and profitably will depend on its ability to deliver it seamlessly across multiple devices. Fostering seamless delivery across multiple sites has been the rationale underlying the IAB since our founding 15 years ago. Yet as successful as we've been in standardizing advertising unit formats, measurement guidelines, work-flow processes, and the like, other central standards have proved elusive. For example, the creative agencies on the IAB Agency Advisory Board have said categorically that their single greatest obstacle to advertising effectiveness and growth is their inability to deliver the same rich-media ads to tens of millions of households across multiple sites because, as they put it, "the rich media toolkit differs too much from site to site."

The proliferation of device-based walled gardens risks making our complex supply chain even more fragmented and complicated than it's been. As Forrester's Bernoff wrote, "Web marketing has grown since 1995, based on the idea that everything is connected. Click-throughs, ad networks, analytics, search-engine optimization -- it all works because the Web is standardized. Google works because the Web is standardized. Not any more. Each new device has its own ad networks, format, and technology." The Apple iPad's lack of Adobe Flash - a core component of much interactive display advertising - only serves to underscore how splintered the advertising economy could become.

But I disagree with Bernoff's conclusion about the Splinternet. Don't "try to unify things again," he says. "The shattering cannot be undone."

Supply Chain Detente

It must be, though, if ad-supported media are to survive. This prompts two suggestions:

  • Device manufacturers and the proprietors of other walled gardens should work collaboratively to adopt consistent standards to allow the advertising and marketing economies to flourish. Beat your brains out competitively, but don't subvert the advertising economy. Join the IAB and contribute to supply chain detente.
  • To the degree that the walled gardens create impediments to scale, publishers need to find other sources of revenue. Media companies must redouble their efforts to add marketing services to their sets of offerings.

Monday, January 11, 2010

Will Congress Break Internet Advertising?

(This article was published earlier today in The Hill.)

The U.S. Congress – the place where former Alaska Senator Ted Stevens once declared the World Wide Web
“a series of tubes” – is not known for technological erudition, so it has wisely kept its hands off the Internet, the greatest economy-boosting innovation of our lives. “The last thing we need,” Rep. Cliff Stearns astutely observed just last week, “is a Government takeover of the Internet.”

I wish he’d tell that to Rep. Rick Boucher – his would-be partner on a still-unseen bill that promises to erode the burgeoning field of e-commerce, harm ad-supported news and entertainment media, and destroy the tens of thousands of small businesses in all 50 states that have come to depend on interactive technologies for marketing, retailing, and customer connectivity.

Writing last Tuesday in The Hill, Mr. Boucher declared his intent to introduce legislation to provide “some baseline protections in the online space” aimed at “protecting consumer privacy.” But within this seemingly laudable proclamation lies either a misunderstanding of how interactive media actually work – or an active desire to hinder the medium’s growth, and jeopardize the 3.1 million jobs and 2.1 percent of U.S. GDP that depend on it.

Advertising is the engine of the consumer economy, and fundamentally the only way American shoppers can compare prices, discover products, and learn about new stores and sales in their neighborhood – and the sole way businesses can get this information to them. Yet the Congressman wants to legislate its elimination. “If someone does not want a website he visits to use information it collects to deliver ads to him,” he writes, “he should be able to opt out of that use.” Worse yet, Rep. Boucher says “if a website wants to provide information to an unrelated third party, it should procure that Internet user’s affirmative opt-in consent.”

But the Internet is built on information – most of it managed by “third parties.” Indeed, about 90 percent of online display advertising is delivered by third-party ad-serving companies. Third-party management of the information units called “cookies” is what limits the volume of irrelevant advertising a consumer receives online. Rep. Boucher might as well title his bill “The Spam Preservation Act of 2010.”

But Rep. Boucher (shown left) isn’t putting only Internet infrastructure at risk. His most disturbing proposal is to place the burden for consumer privacy protections on individual Web sites ­- on the local newspaper’s dot-com affiliate, the cable network’s online feed, and the solo blogger alike. His legislation would force all publishers to implement cumbersome and expensive means to stop ad-distribution to any consumer who demands it, and shatter the systems that enable publishers to provide advertisers reliable measures of their circulation and advertising delivery – the currency that enables publishers to get paid for their work.

Why does Rep. Boucher want to imprison the Internet economy? He says his proposal will “encourage greater levels of general Internet usage and e-commerce.” But government intervention hardly seems necessary, given the enormous growth both have seen. A recent University of Southern California study found that in 2008, the average American spent 17 hours per week online, up from 15.3 hours in 2007 and only 9.4 hours in 2001. What were they doing? Among other things, they were shopping. Online retail sales during the recession-soaked 2009 holiday season increased 5 percent from 2008, with consumers spending $27 billion more than last year.

Everyone in this diverse, mushrooming industry would agree with Rep. Boucher that risks to data security and identity theft must be dealt with forcefully. But to conflate these legitimate dangers with the broader, fuzzier notion of “consumer privacy” is misguided and ultimately more dangerous than the original threat.

Our industry takes consumer privacy very seriously; after all, without the consumer - and consumer trust - there is no internet economy. This is why industry has moved aggressively to provide greater protections. In July, a coalition of five major trade associations, representing thousands of advertisers, marketers and publishers, released comprehensive principles for industry self-regulation, which would create strong enforcement of consumer privacy protections under the auspices of the Better Business Bureau. These principles embrace and expand on many of the concerns raised by consumer groups and by the Federal Trade Commission (whose officials have publically praised the coalition’s achievements).

This increasingly vigorous system of self-regulation and education is working. Even the Center for Democracy and Technology, a consumer advocacy group, in a tally of thousands of complaints filed with states attorneys general over Internet-related abuses in 2006-07, found only one case relating to privacy – a case already covered by existing law.

Rep. Boucher should take the advice of his putative co-author, Congressman Stearns. The Florida Republican says government regulatory “interference should be undertaken only where there is weighty and extensive evidence of abuse.” We could not agree more.