It’s still too early to make any definitive pronouncements about wearables and smartwatches, let alone whether they’ll be effective advertising channels. Nonetheless, mobile ad exchange TapSense today announced “the industry’s first programmatic ad platform for Apple Watch.” It boasts full Apple Pay integration, new ad formats and “hyper-local targeting.”
It sounds great. But there isn’t enough consumer smartwatch adoption to get marketers to pay attention or care very much at this stage. I do however think this is a category that’s here to stay, though some surveys suggest waning consumer interest.
There are numerous Android Wear devices in the market already. None are a mainstream consumer hit but watches from Motorola and LG have gained critical favor. Yet Apple is really the market maker — even if Apple Watch 1.0 doesn’t sell very well it has brought mainstream awareness and interest to the category.
A recent survey from Quartz found that about 20 percent of respondents were potentially interested in the Apple Watch, while 80 percent said they were not intending to buy it. If that survey is representative it could still mean millions of Apple Watch sales.
Other Apple Watch surveys have shown lower levels of buying interest. And a broad new CES-related technology survey from Toluna Quicksurveys found that only 16 percent of 1,000 US consumers were interested in wearable tech in general.
This is partly because, beyond fitness tracking, the “killer app” has yet to emerge for the category. My view is that a small cluster of functions will ultimately take hold and define the experience, driving sales. Right now most smartwatches are trying to do too much; there’s a middle ground to be discovered between “smartphone on your wrist” and single-purpose device (e.g., health tracking).
Android Wear devices have yet to make a compelling case to the public — in my view the software needs major improvements — though the prices are right (sub-$250). Apple Watch has yet to become available in stores so that people can see it in person, though the price ($350 and above) is steep and will keep many away accordingly.
Once the public can see and touch the Apple Watch I suspect interest will bump up. While brands and marketers aren’t yet paying attention to smartwatches it makes sense for companies like TapSense to get out in front of the market and learn what’s likely to work and what won’t with ads. It’s still an open question, however, whether consumers will tolerate most types of ads on smartwatches, which are arguably more personal than smartphones.
I would argue that the right formats and contexts will enable marketers to reach consumers on smartphones. But they will need to be very careful (capital V).
Native ads, selectively utilized, will probably be acceptable. Coupons and money saving promotions also will likely work, provided they’re opt-in (smartphones and indoor beacons may turn out to be a strong opportunity). And video may also work under limited circumstances (i.e., movie trailers). Search marketing will work too; however there’s so little screen real estate that very few ads can appear for any given query. Push notifications will definitely be one of the key marketing tools on smartwatches but they will need to be utilized judiciously as well.
All of this is going to be tricky and take time to figure out. Respect for the user experience will be critical — even more than in a smartphone context.
Right now Android Wear is a festival of relentless email and social media notifications (they can be muted). My guess is that Apple will do a better job with the overall user experience but that the device is currently too ambitious and the hardware isn’t quite right.
Smartwatches also need to be platform agnostic. Why shouldn’t Apple entice Android users to come over with the Apple Watch? And why shouldn’t Google expand its market to iOS users, as it does on the actual iPhone?
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