New York Good news for the news business: Companies are paying newspapers and magazines up to five times as much to place ads in their iPad applications as what similar advertising costs on regular websites.
This doesn’t mean Apple’s tablet computer will live up to its hype as a potential lifeline for the media industry. Online ads still generate a small fraction of news companies’ advertising revenue, and it’s questionable whether print ads will return to what they totaled before the recession.
But early evidence suggests the iPad is at least offering publishers a way to get more money out of advertisers. That bolsters the hope that portable touch-screen computers could start turning the economics of digital advertising in publishers’ favor.
“I think it will redefine publishing and also redefine how advertisers connect with our audience,” said Lou Cona, executive vice president at Conde Nast Media Group, the privately held publisher of such magazines as Vogue, GQ and Wired.
Still, a lot will need to go right for publishers before the iPad and imitator tablet computers become a significant source of income.
For one thing, media applications will have to be compelling enough to keep people engaged for longer periods. That’s especially true if a publisher wants to charge for a news app, because free articles on the Web are just a few taps away on the iPad’s browser. Expect media companies to hold back more material from their free websites and offer it exclusively in tablet apps.
Also, tablet computers will have to get into many more readers’ hands — but without becoming so mundane that advertisers are no longer willing to pay a premium for what now is rarefied space.