Rise of the New Titans, Part I

Recently, both Apple and Google announced that they are launching targeted advertising to the users of their iPad, iPhone and Android devices, respectively. The ‘iAds,’ in Apple’s terminology, can be sent to iPad users based on their real-time geographical location, allowing local retailers to target potential buyers with incredible accuracy. Unlike traditional ad agencies of the past, which took a 15% commission of the total amount of money generated from ad placement, both Google and Apple want to try and retain upwards of 50% of this fee, with a longer term goal of subsidizing the cost of their devices with fees collected from ad revenue.

Google and Apple’s latest venture is a sign that both companies may have reached the end of creating pioneering technology on a mass scale in its purest abstract sense, and are now attempting to expand their business by expanding beyond the somewhat abstract realms of programming and software and into older business service models. Much as the evolution of eReaders may eventually provide a viable alternative to traditional publishing houses, Google and Apple may end up dominating the ad agency business, dramatically altering another sector of the economy.

However, while the potential exists for the companies to achieve market domination, the actuality has yet to materialize. Reports indicate that ‘iAds’, essentially a form of direct marketing, make up about 1% of all internet advertising spending. That said, Google’s more traditional Pay-Per-Click service AdWords is a highly lucrative operation for the company, accounting for a significant chunk of its revenue.

The important point is that both Google and Apple have established themselves as some of the most recognizable brands of the 21st century. They are no longer defined by any individual product, but rather their ability to provide services. This flexibility enables them to tackle new projects without alienating or confusing their customers. By embracing a multitude of different services, Google and Apple are essentially protecting themselves from a downturn in any one industry, making them, for the short term at least, invincible. Through technology, we are witnessing the rise of the new titans. But are these titans beneficial to society as a whole?

Click here for Part Two of “Rise of the New Titans.”