Commentary

Apple To Sell iMacs At NJ Turnpike Rest Stops?

by Ari Rosenberg , Op-Ed Contributor, April 25, 2013

Timothy Cook, Apple’s embattled CEO, announced that Apple iMacs are now available for sale at all New Jersey Turnpike rest stops. The deal sent shockwaves from Exit 18W all the way down to Exit 1.

The iMac, which sells at pristine Apple stores for a retail price of as much as $1,999, will be priced at N.J. Turnpike rest stops on a real-time bidding basis. Drivers stopping in for a Nathan’s hot dog and to use the rest room can bid a dollar amount representing what the iMac is worth to them. If their bid is the highest, they can take the computer with them on the rest of their road trip.

The deal between Apple and the N.J. Turnpike is based on a revenue share on all sales. Apple has the right to set a floor price so the iMac doesn’t sell for less than $200, for example. Apple may also provide the N.J. Turnpike a list of people who are blocked from buying the iMac on the Turnpike. “We don’t want to jeopardize sales from the people we think would enjoy the privilege of paying two grand for our iMac at our flagship stores,” Cook explained.

The CEO, who is under extreme pressure to hit his Q3 revenue goals, said in his statement, “Why not sell our computers to an audience that may not be comfortable driving into New York City, or to people who can’t afford them?” He continued, “This program allows good-hearted folks a chance to buy our product at a price they think is fair, and we can make some extra revenue from computers we couldn’t sell at our own stores.”

The rest stop owners are ecstatic. Sam Bosh, owner of the Vince Lombardi rest stop located near Exit 16, thinks it’s a great deal for him and for Apple. “Who knows, maybe the bids will get competitive and the price our patrons are willing to pay for an iMac will be close to what Apple charges at their own stores,” Bosh said. When it was pointed out that even if that were to occur, Apple has to share the revenue with the N.J. Turnpike, Bosh responded, “Well I don’t know how that all works -- but I do know that since the launch of this Apple iMac program, sales for our fake designer sunglasses have gone through the roof!”

Based on this innovative strategy to destroy a premium brand’s value, Rolex, Mercedes and Nike are rumored to be looking at retail space at 7-Elevens as well as select New Jersey diners and bowling alleys.

Yes, that’s what I am saying -- premium publishers selling their inventory on ad exchanges is like Apple selling iMacs at rest areas and Rolex selling watches at 7-Elevens.

Premium publishing brands are getting used. North of 95% of the ad impressions sold on the exchanges will appear on sites with very little contextual value. So the venture capitalist-backed tech companies need premium inventory to hang in their storefront windows to help drive greater sales of their “fake designer sunglasses.” These tech companies have smartly exploited premium publishers’ fear of “unsold inventory,” combined with the promise to line these publisher’s pockets with found change. Now advertisers driven by their buyers, will show up in droves at the exchanges looking for bargains -- while the premium value that took years for premium publishers to build, will be left on the side of road.

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8 comments about "Apple To Sell iMacs At NJ Turnpike Rest Stops?".

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David Lozovsky from Walk Light Media, April 25, 2013 at 10:39 a.m.
Thats a very interesting take, must say that I agree with this POV and appreciate the metaphor. As a seller of premium publisher inventory I think it truly hits home with the state of the market, our long standing clients are fleeing to exchanges and RTB platforms with the promise of getting the same thing cheaper, which may become a self fulfilling prophecy if publishers continue to place premium placements on the exchanges.
However, in the long term, this will lead to lower quality content and then a lower demand for that inventory, so it is a short sighted solution. Publishers cant afford to create premium content on RTB revenue.
It brings to mind the saying, champagne taste and beer pockets. Hopefully this situation evolves to a natural balance/equilibrium where there is an ecosystem that every one can thrive in.
Reply

John Peebles from Sojern, April 25, 2013 at 10:44 a.m.

Unfortunately the analogy of Apple's retail environment and "premium publishers" doesn't hold. Here is another modest proposal:

Users of the term "premium publisher" are masters of self-deception, still living in an analog world where the ability to distribute content offered a competitive advantage.

Most online advertising inventory today is on web pages created by ordinary people in the course of their ordinary lives.

The old notion of media planning is dead. Reaching consumers in the right context is what matters. Figuring out how to execute great advertising to fit the right consumer context is where we are going.

Pete Austin from Fresh Relevance, April 25, 2013 at 10:45 a.m.

You *really* think this hurts Apple's brand? http://noipictures.photoshelter.com/image/I0000EFGwsLTnbvk

Steven Flax from Cardiff Fulfillment Corporation, April 25, 2013 at 10:53 a.m.

Your iMac article was a work of genius. So clever and incisive. (Move over Jonathan Swift.)

Andrew Boer from MovableMedia, April 25, 2013 at 11:05 a.m.

Ari, nice metaphor and I agree as far as it goes. But c'mon.

I have read about 50 different articles making this point on OPI in one way or another over the years, dating back to the days when Jim Spanfeller and David Koretz used to pen a column. I think you have written a few of them yourself. We get it--premium publishers shouldn't sell "remnant" through exchanges.

Unfortunately, the time for this conversation was 2003, not 2013. Premium publishers, who didn't retain enough control of their data and inventory and let the exchanges sell their audience from beneath them, well they killed their business. Google helped. So did the IAB, IMHO. But who knows, they may well have died anyway.

That war is over--premium display lost, and most online display advertising today is direct response or retargeting. I think there is no such thing as premium display anymore, except tied to a few narrow categories with captive audiences, like say, video. The narrative now is about advertorial, "native advertising" and content marketing.

I think a more interesting topic for premium publishers is what the long term impact of Outbrain and paid content amplification programs will be. Outbrain seems to have pretty much supplanted Google AdSense as the monetization vehicle of choice for premium pubs. Would love to know what you think the impact of those networks would be.

philip gentile from Consultant, April 25, 2013 at 12:04 p.m.

I don't understand why you would actually waste my time writing an article such as this one. What wisdom were you trying to impart with this?

James Curran from www.staq.com, April 25, 2013 at 12:59 p.m.

I understand the picture you are painting, but the PRICE is what denotes premium in our industry, not where or how you buy it.

If publishers put a high floor out on the exchanges and still used a velvet rope on the advertisers that they let through, then their CPMs would stay in tact.

I realize that where and how it's purchased CAN change the brand value sometimes, but the DoubleClick Adx is hardly equivalent to a rest stop....

It's more like Apple putting a store in Grand Central Station.

... oh wait.

Ari Rosenberg from Performance Pricing Holdings, LLC, April 25, 2013 at 3 p.m.

Thanks for such great and insightful feedback from both sides of this argument -- I read every word of all of your responses and your arguments supporting and negating mine make a lot of sense -- which is why I still find this topic compelling.

@ Andrew Boer -- submit a guest column on Outbrain and the problem they are solving -- that would be interesting and you can do a better job on that than I can in this area of content marketing