Advertising Opportunities and Challenges with the new Apple TV--"the future of TV"

Apple released the new Apple TV yesterday and Tim Cook called it " the future of TV". Instead of switching among different programs, users can now swipe to or ask Siri to bring up what they want, ranging from games, shows, films to even shopping apps. It is all about apps. 

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On the event yesterday, Gilt Groupe’s CEO, Michelle Peluso, showed off the company's App designed specifically for Apple TV. Now, we can curl up in couch, browse pictures of models wearing our desired dresses or sneakers on the high-resolution big TV screen and just buy them directly with a click on "BUY NOW" as what we are so used to do on computers, laptops and mobile devices. 

Despite the innovative shopping apps, people also watch videos, shows and films and play games through different apps on Apple TV. Broadcasters can no longer force audience to watch commercials between and during programs. With the App Store for Apple TV, the functionality and possibilities with television will be expanded greatly. 

With all of these innovation, I see some challenges as well as opportunities. 

As mentioned in class, it is hard to measure a TV commercial's impact on audience's behavior, i.e. how much does the ad contribute to the final purchasing action? Now as consumers can shop directly on TV, it becomes much easier to track consumers' behavior and measure the effectiveness of ads. It may also help with cross-platform measurement since IOS users apply the same Apple ID to all Apple devices. 

Applications help strengthen customer loyalty. People are less likely to switch to other brands or platforms( for example, switch from Amazon to Walmart) when they make a purchasing action through an app. App store for Apple TV for sure expands the market size. However, a great challenge associated with apps, as what have been observed on mobile devices, is that it is hard to keep customers use them regularly. Maintaining the app for using on high-resolution TV and keep it compelling and consistent with mobile apps  is not an easy thing to do. 

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Commercials have less control over audience since some platforms, such as Netflix and Youtube, provide ads-blocking or skipping ads services.Nevertheless, there are more opportunities to provide audience with customized and personalized advertising content on Apple TV. The potential of offering ads people want to see and capturing most of consumer surplus is greater. But obviously, proper customization is hard to realize and maybe too expensive to implement compared with traditional commercials on traditional televisions. 

Sources:
http://marketingland.com/gilt-shows-how-apps-and-online-shopping-are-coming-to-apple-tv-142067
http://www.wired.com/2015/09/first-look-souped-siri-powered-apple-tv/?mbid=nl_9915