Once upon a time, the iPod nation was just a bunch of people connected by white earphones. Now, thanks to the huge sales numbers from the 2004 holiday season, iPod owners top 10 million, and that has advertisers salivating over the marketing potential of Apple’s little music box.

McDonald’s, Gillette, Epson, Schneiders, Fuji, Microsoft and Best Buy have been among the first companies to get involved in promotions and joint partnerships with the industry’s leading online music vendors, setting the stage for what appears to be the next big trend in non-traditional advertising.

Since ‘podvertising’ is a new and relatively unproven medium, some advertisers are wondering not only about how to effectively reach a traditionally ad-weary audience, but whether it is even worth trying to.

However, Max Lenderman, VP/CD and co-founder of Montreal-based experiential marketing firm Gearwerx (which counts DaimlerChrysler and Unilever Canada among its clients), believes that the opportunity for advertisers to reach iPod users is out there, if (and granted it’s a big if) advertisers can produce content in which the exchange value outweighs the annoyance value.

Lenderman points to the success of Nike’s ‘Art Of Speed’ blog campaign to illustrate his point, adding that for advertisers to thrive, they can’t hijack the medium – they must work with it in an organic, non-intrusive way.

While many of Canada’s marketers are assuming a wait-and-see approach with podvertising, some brands are taking the initiative to reach iPod’s coveted early adopter community before the bandwagon picks up steam. Lenderman points to some current related successes, including brand sponsored exclusive content featured on digital music sites such as iTunes, arguing users will be willing to listen to a little commercial if it means having access to music you can’t get anywhere else.

‘Podcasting,’ the latest buzzword to come out of the iPod community, has seen rapid growth in recent months with companies like Heineken and WNYC Radio in New York jumping on board to produce weekly and daily shows with advertiser-sponsored content.

Other big-time brands are getting involved in non-traditional ways. Mercedes-Benz and Apple have joined forces to promote a new iPod-integrated system in Mercedes’ high-end vehicles. This relationship is expected to result in a strengthening of the brands with consumers appreciating both the service provided and the weight the brands carry.

What’s on the horizon for iPod? Apple sold half of all its iPod units in the months leading up to Christmas, and with the iPhoto hardware upgrade available on new models, and highly publicized rumours of a Flash-based iPod hitting shelves in the near future, it doesn’t look like the bottom will be dropping out any time soon.