Ads in the Things You Buy
So Henry Blodget thinks ads in the new Amazon Kindle Fire is a bad thing. Most people commenting on this seem to be appalled at the idea of something you buy being served with ads, particularly third party ads. While I personally agree that the ads are a disconcerting user experience and an eyesore, will people outright reject the new tablet because of it?
I think Amazon is going to have a big hit on its hands. Amazon has proven with the Kindle that it can build quality hardware and move a significant amount of product into the hands of customers. The price point destroys what Apple offers, delivering a full-fledged tablet computing device into the hands of everyday consumers. Plus, in a bit of a recent twist, it looks as if Amazon is relenting on the most obnoxious of ad placements for a small fee. In other words, it gives people the same functionality without paying the Apple premium in exchange for minimally invasive ads. And because Jeff Bezos has publicly stated that Amazon wants to make money when people use the device, look for that price to go lower come the holiday season. Apple will continue to drive the higher end of the market, but all other consumers will go for the best cheapest option.
What about Google and Samsung’s tablet offerings that are the same price without ads? They will thrive as well, but Samsung needs to make their money from people buying the devices. Google has only been flirting with hardware thus far, has not fully integrated Motorola yet, and does not have nearly the amount of content that Amazon has to drive a viable content business. Let’s face it, with Gartner predicting a nearly 100% increase in tablet sales this year from 60 million units last year, there is plenty of room for all to compete.
However let’s get back to the point about ads. Are ads interwoven with the viewing and usage experience really that off-putting? History shows there is little evidence of this. If anything, ads have only gotten more invasive and pervasive across all media. Why? It is because people willingly accept overt advertising in exchange for free or heavily subsidized products. Before the advent of cable, there was no avoiding all the ads in between TV programs. Despite that, people still bought televisions and placed them all over their homes. People buy newspapers and magazines that are heavily subsidized by display advertising. Even the content itself is infiltrated with ads as many movies and TV shows sell product placements as a way to cover ever rising costs of production. Ads plaster stadiums, bathroom stalls, billboards in the countryside, cars, buildings, and everything else.
Even things that are considered public goods are driven ultimately by advertising. Did you enjoy the recent Olympic Games in London? Were you annoyed that NBC Olympic broadcasts were slathered with ads? Were you curious as to why the IOC was so militant in trouncing all non-sponsor guerilla marketing tactics? Without those lucrative corporate sponsors, the Olympics never happen. Same goes for the NYC Marathon, most charity based events, and all those wonderful parades that proceed down 5th Avene every few months. The average viewer is not paying to watch these events, that bill goes to the corporate sponsors.
The web has been wise to the power of ads ever since the late 90’s. Companies like AOL, Yahoo, About.com and all those first generation web companies charge enormous sums for companies to buy banner ads. Ad companies like DoubleClick thrived in this environment. Then Google came in with search advertising, upturning the whole economic model. Nowadays there is not a popular website that does not have ads somewhere on display.
And what of the mobile experience? While you are getting all pissed off about ads in a tablet device you might never own, you readily download free apps off the Apple or Google app stores. You are tweeting over Twitter and posting stuff on Facebook and wasting time playing Bubble Shoot. All are driven by a business model built on top of serving you ads and this will only continue to rise as they tweak their mobile experience to more easily serve ads that are better integrated into the limited display real estate of smartphone and tablet screens.
This is to say that ads are not going away. Those services which overreach with advertising will not succeed, but what Amazon is doing is certainly within the realm of acceptability. Some will pay to dismiss the ads or will migrate to services that eschew advertising such as App.net. Some will continue to grumble about the gross commercialization of the web. I believe most people however are going to vote with their wallets and select the cheapest option that is close enough.
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