Apple today took the wraps off what it intends to do in the mobile advertising space – and it more or less involves remaking it.
Specifically, the company’s iAd platform is designed to take advantage of the huge popularity of apps – and the App Store happens to offer 185,000 of them – and deliver the kind of ads that combine the emotion of TV with the interactivity of the Web.
At the iPhone 4.0 OS unveiling in Cupertino, Calif., today, Apple CEO Steve Jobs showed demos of how it would work, with ads designed to keep users in their apps.
Apple, which bought Quattro Wireless earlier this year, will sell and host the ads, and 60 percent of the iAd revenue will go to the developer. As expected, Apple will deliver ads in HTML5.
The company figures the average user spends more than 30 minutes every day using apps on their phone. If an ad went up every three minutes, that would be 10 ads per device per day, adding up to 1 billion ad opportunities each day.
Of course, there are implications for other companies involved in the mobile ad space. The iAd platform offers Apple a lead over Google in mobile advertising, says John Jackson, vice president of research at CCS Insight.
Google still is in limbo with its acquisition of AdMob as federal regulators examine whether it’s anticompetitive. But Apple’s further foray into mobile advertising also bolsters Google’s argument that the mobile ad space is competitive and will remain so if its acquisition of AdMob goes through.
Paran Johar, chief marketing officer at Jumptap, one of the few longer-standing independent mobile ad firms out there, says Apple’s iAd moves prove how companies that traditionally weren’t involved in advertising see the potential that mobile advertising offers. And he points out that Jumptap’s approach is different – it can help advertisers reach their audience if they’re on Palm, Android, BlackBerry or iPhone. “We’re completely open across multiple systems,” he says.
Independent mobile ad platform provider Millennial Media has a substantial business on the iPhone and will continue to grow that over time, says Millennial Media President and CEO Paul Palmieri. He also says what developers will like about Millennial’s solution is it’s cross device and cross platform. “Advertisers buy audiences” and those audiences don’t necessarily choose one platform or another, he says.
This week, Millennial announced support for iPad as well as some new features for its PadMedia Creative Suite, including Return-to-Play, which allows consumers to pause their application while responding to an ad and then returning to the app when ready – similar to what Apple announced.
Palmieri says he’s happy to see Apple jumping into the market. “I think we have another player in a very early market and more validation that mobile is just at the tip of the beginning of this market,” he says.
Mason Wiley, senior vice president of marketing at online ad network Hydra, says the lack of standardization among devices has been a problem for mobile advertising. But iPhones represent a large installed base, and iPhone users alone are an attractive segment for advertisers. “The fact they bought an iPhone says something,” and some advertisers will want to target them for that reason.
Overall, Wiley says he’s encouraged by what Jobs and company unveiled – especially if they can pull it off. Presenting ads in a relevant and engaging way that consumers actually enjoy has been a challenge for the ad industry for a long time, but that appears to be exactly what Apple is trying to do.
Apple didn’t give out a lot of details today about what type of review process will be involved in the advertisements but suggested it would be a “light touch.”
Greystripe CEO Michael Chang applauded Apple’s achievement but points out that some of the things Jobs outlined for iAd, like eliciting an emotional response and functioning within the app, are things Greystripe has been doing for more than 18 months. He also says the iAd debut left a lot of questions unanswered, like whether Apple/Quattro will help create advertising collateral for brands or agencies and what types of ad targeting will be possible with iAds.
“The in-game ad that Apple demoed today was almost exactly like Greystripe’s Alice in Wonderland interactive ad campaign,” Chang says in a statement. “The challenge that Apple faces is that they require HTML5, while almost all existing advertising collateral remains coded in Flash and other Adobe tools. Unfortunately, Apple’s announcement today raised as many questions as it answered.”