Apple announced yesterday its foray into the mobile advertising market. This is Apple’s first move into an ad funded commercial solution and follows its purchase of mobile adserving platform Quattro eariler this year (after being beaten to its first choice AdMob by Google). The basics of the system is the ability to embed banner adverts within applications that lead through to immersive brand experiences on the iPhone. This focus on engagement and interactivity positions the iAd platform a long way away from the current forms of mobile advertising and opens up a market place that has been promised as the “next big thing” for nearly a decade!
The commercials of the iAd’s turn every developer into potential media owner with 60% of the revenue from the advertising being passed back to the developers and Apple keeping 40%. This is an interesting dynamic, but when this is compared to a banner network buy, with the network representing the developer’s share and the Apple fee representing the cut taken by the adserving platform (such as Doubleclick) from both the media owner and advertiser then it can be seen as comparable in certain cases.
The big question is going to be how will the adverts best be used. The opportunities for brand engagement seem clear, however the opportunities for direct response (as Steve Jobs mentioned in his presentation) are less so. This is important as it has been direct response advertising that has driven the explosion in search advertising, whereas the brand engagement sphere of digital display advertising has been slower to catch on. If Apple can make iAds work as a clear direct response channel then their route to large scale advertising revenue will be clearer.
However things turn out, as with most markets Apple enters, the world of mobile advertising will never be the same again following Steve Jobs presentation yesterday.