Mixed Reviews — and Mixed Reports — for Apple's iAd
Depending on what you read, Apple’s iAd program is either a revelation for national marketers or an inconvenience.
The platform, which Steve Jobs announced in early April and which officially debuted July 1, aims to improve mobile advertising for businesses, publishers and consumers by building out ad units that reside wholly within existing applications.
If this vision is executed, the ads — veritable mini-apps replete with audio, video and mapping capabilities — would help advertisers develop more dynamic experiences for users in a single location that doesn’t require them to launch a separate browsing page. The net result is a more satisfying user experience that also delights publishers by retaining customers within the native apps.
On one end, only two of Apple’s 17 initial launch partners, Nissan and Unilever, had actual campaigns running in July (three others have since joined the fold). The Wall Street Journal reported that Chanel SA has tabled its iAd plans for now, while other partners are struggling to adapt to Apple’s demands for control. Apple singularly handles all ad-unit production and does not specify where the ads actually appear, which can leave agencies in the dark as to the platform’s capabilities. Ad development and integration can take up to 10 weeks, which has forced marketers and agencies to adjust their traditional timeframe for mobile ad production.
On the flip side, early returns from those using the service have been stellar. Nissan reports that customer time spent with its Leaf car iAd is tenfold the interaction time with comparable online ads. Clickthrough rates are five times higher than the automaker’s online banner ads.
Publishers are raving, too. Dictionary.com President Shravan Goli heralds the service for delivering eCPMs that are 2-3x higher than other mobile ad networks. This, in turn, puts a surge into mobile ad rates.
All told, Apple touts that it enlisted more than 10,000 developers in the first month alone, buoyed by an undeniably strong value proposition that bundles software development for applications with subsequent iAd placement.
Criticisms notwithstanding, Apple has a fleet of advertisers ready for launch. These early adopters are reportedly paying up to $1 million for packages, a price-point that isn’t feasible for down-market businesses at this early stage. Apple already boasts $60 million in iAd commitments through the rest of the year, leading the company to state that it will own more than half of the mobile ad market in 2010.
The race in the mobile advertising space is only beginning, and iAds must still answer many longer-term questions. Will advertising partners renew? Taking it a step farther, can Apple induce a bigger buy from traditional agencies that are only beginning to streamline mobile marketing strategies? Will users continue to engage iAds with such depth, effectively driving higher ad rates and headier buys? And how will competitors such as Google’s Ad Mob factor into the marketplace?