iAd Solves Some Problems With Mobile Ads — But Not The Most Important Ones

7 Comments

Credit: gdgt

The iPhone has already been credited with helping to lift the mobile ad space out of obscurity, and Apple’s new ad platform will further capture the attention of marketers and ad-agency creatives, helping to drive new revenues.

But iAd’s impact will be limited for two reasons. The first is the lack of a standard metric for mobile advertising, which continues to hold back online ad spending in general. Until Apple (NSDQ: AAPL) can solve that problem — outside app analytics companies like Flurry are certainly trying — mobile buys will continue to be modest and mostly experimental.

To put it in perspective, eMarketer says marketers spent just $416 million on mobile ads in 2009 — compared to the $22.7 billion spent across the web last year, according to the latest numbers from the Interactive Advertising Bureau. The other constraint about iAd is that it’s mostly a self-interested solution. It’s app-centric, and the majority of the mobile universe doesn’t use an iPhone and that won’t change anytime soon.

In his presentation earlier today, Jobs expressed a sentiment that even many mobile ad evangelists concede as well: “We think most of the mobile advertising really sucks. We thought we might be able to make some contributions.”

But the main contribution Jobs is talking about involves making the iPhone app experience a little less vexing. As Apple explains in its release, when users click on mobile ads, they’re almost always taken out of their app to a web browser, which loads the advertiser

7 Comments

Walt French

“the majority of the mobile universe doesn’t use an iPhone and that won’t change anytime soon.”

Well, *probably* not. But that’s the SILENT MAJORITY of the mobile universe; they’re not online with anything like iPhone users’ intensity. Some surveys show iPhones driving over 60% of mobile ad hits.

This, BEFORE Apple does anything to help developers monetize their products by selling ads within their apps, which could easily double iPhones’ ad hits.

As to metrics, the Apple approach potentially gets to have it all ways: impressions, clicks, time spent in mini-game, … all cross-indexed by geo, demographics, iTunes billing, and whatever else marketers care about.

Did you talk to a non-competitive marketing firm or ad agency? I don’t see this as a gold rush, but it’s got to raise some heavy duty interest.

zato

Microsoft / oaidContent is again attempting to discredit another Apple product. There is good evidence from app creators who monitize with ads that advertising on iPhone is effective, and will now become even more so.

hypermark

So totally disagree with the conclusion here. What Apple brings to the equation that others can’t is critical mass and a governed experience. With 85M devices as a target, they are in a natural position to create de facto standard units, and they have enough credibility with brands and agencies, that I suspect the line to buy in will be around the corner.

Will it happen overnight? No, but to suggest that they didn’t solve the most important problem is to confuse the tail with the dog.

The bottom line is that if you think of iAds as a platform in their own right, it should be seen iAds feels like a core competency, and exactly the type of initiative where Apple can knock the ball out of the park.

Food for thought.

Mark

NookSurfer

I’m interested in seeing how this plays out. My guess is leaning towards greed on Apple’s side. They want a piece..or should I say a bigger piece of the pie.

Ed Dunn

Just like “real time search”, this thing called “mobile advertising” is some made up stuff by non-industry people who don’t have their finger on the pulse.

If anybody seriously think they can slap billboards/banners on personal communication devices, then they aren’t serious….

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