Late Apple CEO Steve Jobs was hopeful about the iAd, a mobile advertising platform that utilizes emotions associated with TV ads and the interactivity that makes up web ads. Despite Jobs’ ambitions for the project, it appears Apple is bypassing it, or will attempt to revamp it completely.
New ReportThe mobile ad network was pushed for six years, however a new report from BuzzFeed suggested Apple is slowly saying goodbye to iAd sales and focusing on an automated platform instead. This is widely regarded as a huge change since Apple was reportedly going to charge advertisers about $1 million to place ads on iPhones, iPads, and iPod Touches. iAd launched in July of 2010, with the Wall Street Journal reporting Apple could charge upwards of $10 million for the right to place ads on its devices. It was considered an outstanding advertising option at that time, and ads cost between $100,000 and $200,000.
ExpansionApple has noted it will seek to expand the iAd platform through a self-service ad-buying feature that’s become popular among publishers. This expansion is expected to take place over the next few months.
The Initial LaunchThe platform’s 2010 launch saw mobile ad campaigns from bigwigs such as Walt Disney Studios, Target, Best Buy, AT&T, State Farm, and numerous others, with iAd commitments totaling over $60 million at the time. This represented almost 50 percent of predicted mobile ad spending in the U.S. for the second half of 2010.
An Attractive Idea…The iAd platform was appealing because it solved a legitimate mobile ad industry issue. Users who clicked on mobile ads in 2010 were usually navigated to a separate web browser that loaded advertisers’ web pages. They subsequently had to get back to the original app they were using, but often found it difficult to return to what they were working on. Apple alleviated this issue through the display of full-screen video and interactive ad content so users wouldn’t have to leave their apps to check out an ad. And while the iAd was arguably a very attractive idea, it didn’t exactly live up to its hype, or Jobs’ expectations. According to eMarketer, last year was fantastic with regard to ad spending in the U.S., and mobile ads were thought to overtake desktop ads for the first time in advertising history. eMarketer predicted mobile would account for 51.9 percent of digital spending in 2015, and that the desktop share would continue to decline through 2019.
A Big Difference
The iAd made for about $487 million in ad revenue in 2014, according to eMarketer. Compare that to the estimated $59.6 billion generated by Google and the $11.5 billion generated by Facebook in the same year. Apple therefore accounted for 2.5 percent of the market share in 2014.
So, why did the iAd fall short? Is it due to Jobs’ death, which interfered with his company’s ad vision? Did Tim Cook’s data aggregation philosophy have an impact on ad strategy? He criticized Facebook and Google in 2015, saying that they used private consumer information for profit.
Essentially, Apple underestimated the challenges associated with iAd success. Why? They’re not an ad-driven company.