If you’re in advertising, Apple has always been a bit out of reach. Unless you were one of the lucky brands to have an app featured in one of their commercials, you’ve probably given up on ever getting a sales call from an Apple. But that all changed last month, when Steve Jobs announced iAd, Apple’s first ad network. Since the announcement, there have been a number of great articles written providing more details into the new offering. Here are a few of the things you should know…
What is iAd?
Quite simply, iAd is an ad network for “in-app” advertising. The format of these ads isn’t standard, it’s a new format designed to offer richer interaction… without flash, of course. Here’s a video of iAd in action:
How much does it cost?
Apple has taken an unorthodox approach, charging a reported $10 cost-per-thousand impressions AND a $2 cost-per-click. The cost-per-click in particular is very high, and the charge for both impressions and clicks isn’t standard. This combination also makes the overall cost of the ad placement very high.
How can I participate?
Well, according to the folks Apple has already reached out to, you’ll need a hefty spend of 1 million to be one of the first advertisers. In addition, it appears that because Apple bought Quattro Wireless, some of the first brands being contacted are those Quattro already has a relationship with.
From an Advertiser’s Perspective… what’s great?
One of the best things about iAd is the rich ad format. It makes me think about what ABC did with their “Ad Pods” for full-episode online viewing: while most advertisers were running pre-roll video ads, ABC created a rich format that allowed for much more than just watching a commercial, but providing an interactive experience. As a result, brand recall is higher, engagement metrics are higher… I would expect the same thing with this new format. According to Wired, however, Apple won’t even let advertisers design their own ads, and will eventually release their own advertising SDK.
It is an untapped market. Steve Jobs mentioned a potential of 1 billion in ad impressions daily. We’re talking about a market that isn’t just untapped, but extremely engaged with their devices.
Finally, this will advance mobile advertising forward. Apple’s reputation as a harbinger of the future will be enough for folks to pay attention to mobile advertising. Brands have been dabbling for years in mobile ads, but this will represent a tipping point. It will also set a benchmark for other mobile ad networks to offer richer ad experiences.
From an Advertiser’s Perspective… what’s not so great?
There are a few concerns any advertiser should have with what we know…
According to the Wall Street Journal, antitrust enforcers are taking an interest in Apple’s changes to the developer agreement, which forbids developers from selling any third-party advertising through their apps. Many developers are currently making revenue through the sale of advertising. Apple will provide ads under the new agreement, and ask for a 40% cut.
What’s shocking for those buying advertising is that changes to this developer agreement would suggest that the use of third-party tracking like DoubleClick and Atlas may not be allowed. There aren’t many advertisers today that would entrust reporting solely to the company selling them the ads, that’s why the industry developed third-party tracking in the first place.
Even if tracking were to work, the pricing model calls into question the ultimate effectiveness of the ads. Some advertisers will pay a premium just to be associated with Apple at this early stage. However, most brands have a finite budget, and will want these ads to show a positive financial return. Such high initial costs will make it much harder for these ads to perform. Of course, if we can’t track how they perform, it won’t really matter, will it?
The Final Word
In the iAd announcement, Steve Jobs says that online ads right now have interactivity, but lack emotion. This is something he cites as the strength of television. If this new ad network and format are to be a bridge between the two, the real test will be how they perform for the advertisers.
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