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Opposing forces: iAds, data rationing and streaming media

Apple announced iAd earlier this year and yesterday we got to see the fruits of this new strategy.  iAd brings in-app advertisements and allows users to experience ads without leaving an app.  Steve Jobs showed a demo iAd for the Nissan Leaf which looked pretty amazing, but the question is how much data is that iAd pulling and what impact will that have upon your newly rationed data plan?

We have had low bandwidth ads on websites for a long time now, and that will likely remain for a while to come.  The difference with iAds, if the Leaf demo is a guide, is that they could start eating up significant chunks of data.  I have no idea how much data was being pulled by the Lead ad yesterday, it was a 30 second hi-res video introduction into a mini-app, so let’s imagine the whole package was 5MB.

That’s not very much, unless you have the new 200MB Data Plus plan in which case it’s 2.5% of your monthly allowance.  To put it another way if you pull one 5MB iAd daily over a month, you would be close to using up half of your monthly data allowance on the 200MB plan.  You’ve basically paid a lot to view ads.

The solution sounds simple: don’t pull any ads if you are worried about your data usage.  Not so fast.  Since these ads can be designed to be so sophisticated many will likely have carrots to make us pull the whole ad and watch it to the end.  For example at the end of the Leaf demo ad Steve was taken to a screen where he could enter a competition to win a new Leaf.

Perhaps I’m being a bit picky with this example; after all it’s based upon a demo iAd and I’ve speculated on the amount of data it’s pulling.  There is a similar impact upon iTunes, Netflix, Pandora and the like.  Even though those are apps which the user wants to get data from, usage patterns may change unfavorably if users start to get nervous about incurring overage charges.  I guess what it comes down to is the idea that once data consumption starts to be rationed, users will start to be much more wary of how they use their phones.  This phenomenon will not be unique to the iPhone because other smartphones pull a lot of data too, but it is currently unique in the US to AT&T and hey, the iPhone is only available here on AT&T.

There’s always WiFi of course but while AT&T is moving towards a rationing model for cell network data, Sprint is moving ahead in the speed game and offering totally unlimited 4G usage.  With its reliance upon iTunes, the App Store and selling media over the air, the last thing Apple wants is for iPhone owners to think twice about buying music on the move while Evo 4G owners have the freedom to pull whatever they want.  Expect Sprint’s marketing department to capitalize upon this.

Neil Berman

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Jun 8, 2010 - Posted by | Analysis, Apple, Mobile | , , , , , ,

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