iAd ‘Multi-touch’ Apps to Spur Digital Product Placement

iAd multi-touch advertising, applications using the patented technology found on Apple’s iPad device and other portable tablet computers will instantly enable consumers to buy what they see online and share it with their friends. Whether it’s watching their favourite TV show, playing the latest video game or reading the latest eBook, the use of product placement in multi-touch tablet computers is going to usher in whole new wave of interactive advertising.

The opportunities are endless and marketers should take advantage of the interactivity capabilities. For example, should a viewer be watching a TV show and like what an actor is wearing, the viewer can simply click on that item for more information and be taken to the brand’s website and shopping cart for purchase online.

The use of targeted advertising around specific content is also likely to occur. Ads can be tailored to each individual iPad through such technologies as location data (already used in the iPhone). We expect to see more ad-funded content as advertisers struggle to find a place in the digital TV arena as consumers are increasingly fast forwarding through the ads. In order to compete, television will need to deploy social TV Widgets, t-commerce and increase the use of live programming and create social programming formats that will appeal to global IPTV audiences who will increasingly be using Internet-enabled TV sets.

The 3 key growth areas for multi-touch advertising on the iPad will be:

Digital Product Placement
iAd multi-touch advertising will see increased usage of product placement by advertisers embedding brands into multimedia content; films, TV, video games, newspapers and magazines. Newspaper and magazine companies will become multimedia production studios and will be able to sell more interactive advertising inventory into their mastheads and covers. Consumers will be able to purchase goods and order services instantaneously by touching the product in the content they are watching, playing or reading on screen.

In-Game Advertising
Current spending on web-based in-game ads is expected to grow by nearly 79 percent in 2010 and will top $511 million. We see this trend continuing with the advent of multi-touch devices and tablet computing. With younger audiences preferring to receive their advertising inside content and game play narrative.

Branded Virtual Goods
In 2009, financiers invested over $1.38 billion in online social games and virtual goods-related businesses, more than three times the amount invested in the same market in 2008. We remain very bullish on virtual goods as nice addition to in-game advertising, if not an actual industry unto itself. Virtual goods and virtual currencies (and iPad apps), represent a very positive business model and shift away from interruptive advertising.

James Grant Hay is a digital entertainment consultant and founder and CEO. His firm regularly advises advertisers, broadcasters and rights holders on advanced advertising strategies in connected entertainment.