Last week Apple made the move to open up its iAd platform to a broader audience. With this change, anyone with an Apple ID can create an account with the mobile-ad management tool, iAd Workbench, and begin a campaign within two days. Until now, the tool has only been available to registered mobile-application developers.
Upon first initiating its mobile-ad business, Apple invited a select group of brands to utilize its tools. Though Apple promised successful reach to each brand, it struggled to get the platform off the ground. Companies like Unilever, DirecTV, Sears and State Farm were among the first, big clients to participate in iAd, but Apple received little participation otherwise.
Advertisers paid $1 million simply to have access to the platform, but would sometimes pay up to $10 million for a spot in exclusive categories. These kinds of prices turned away many advertisers and resulted in a major price cut in 2012, lowering the developers spending threshold to $100,000 and increasing the developer’s cut of revenue from 60 to 70 percent.
While lowering its entry expenses helped create more competitive pricing, especially in the last few months, Apple still wasn’t finding the success it had hoped for with iAd. In response, Apple is moving closer to Google, offering their mobile-ad platform to the public and, therefore, to a wider variety of advertisers.
Apple hopes that in opening iAd to the public, it will be able to draw in a new kind of advertiser that it has never worked with in the past. Amateur ad developers (likely not too amateur), such as independent filmmakers or small, local car dealerships who wouldn’t have taken an interest previously, are anticipated to take full advantage of this availability.
Additionally, this interest from smaller advertisers could potentially influence the participation of bigger companies. Overall, the accessibility and availability of iAd will definitely garner interest from companies big and small in a way that Apple likely wouldn’t have been able to if iAd Workbench were kept private.
In addition to the wider availability, iAd will also boast new capabilities for customers using Workbench to launch, track and adjust their campaigns. Users can now run short videos in an ad unit, which can direct viewers to a separate website or promoted iTunes content, and not just a mobile app. iAd will continue to be available only on Apple’s iOS devices.
iAd has also been adding to their executive team, showing a corresponding acceleration in business. Net revenue hit $260 million last year, a big increase from $38 million in 2011. eMarketer also expects net revenue to continue rising this year and reach as high as $487 million. However, despite these positive numbers, iAd’s market share, at 2.7% US revenue, still falls behind Google and Facebook.
Though Apple appears to be lagging behind the likes of advertising leader Google, it still has a few tricks up its sleeve. The company has been slowly deepening its advertising ties through iTunes Radio, which launched last September. The streaming service promises to rival Pandora, another top mobile-ad revenue earner, and has recently brought on American Express as an exclusive sponsor of iTunes Radio First Play, a channel that promotes music a week in advance of its official release.
While the iAd Workbench changes have not expanded to include iTunes Radio, incorporation seems to be coming in the near future. Additionally, with these changes in availability and capability, the success Apple has been looking for since the release of iAd in 2010 seems not far off as well.
[Source: Ad Age]
