Apple's iAd Platform: Success or Failure?
The early returns are rolling in on Apple's iAd mobile advertising platform, and so far the results seem mixed. Few of the iAd partners have actually launched campaigns on the iAd platform, and there are complaints about Apple gumming up the creative process, but the iAd campaigns that have been launched are reportedly doing quite well.
According to an article in the Los Angeles Times, Nissan and Unilever are both impressed with the iAd results so far. The paper reports that "Nissan, which created a multilayer interactive ad for its electric LEAF car, said customers spent an average of 90 seconds with the ad--10 times longer than interaction times for comparable online ads. Moreover, people chose to "tap" on the Leaf iAd five times more frequently than they clicked on regular online display ads for the Leaf."
On the other side of the spectrum, the Wall Street Journal recently reported that many advertisers are frustrated with the culture of creating iAds with Apple--which has put its typical control-freak footprint on the creative process. The WSJ article states "That has made the creation of the mobile ads laborious, taking about eight to 10 weeks from brainstorm to completion--longer than normal for most mobile ads, executives said. The building of the actual ad, handled by Apple, in some cases is taking two weeks longer than expected, one person added."
I spoke with Scott Schwarzhoff, vice president of marketing at Appcelerator, who said "Developer interest has been strong. Behind multitasking, iAd was the most requested iOS4 feature in our survey of 2,733 developers in June. Of particular note, a few Appcelerator Titanium developers with iAd mentioned that they like that advertised apps can be installed without leaving the current app, especially since it seems like a lot of ads are for other apps. Performance statistics are mixed, with the jury still out on fill-rate and click-through performance."
Greystripe director of marketing Dane Holewinski told me "The fact that they require HTML5 and design the ads themselves may prove problematic on the scaling side. Agencies and advertisers often want to have control over the creative process, which Apple doesn't give them. Additionally, being on a single platform limits their ability to scale. What advertisers want are audiences, not platforms. There are many millions of users Apple can't reach. They may be successful in filling a niche, but there will always be the need for other solutions to reach mobile audiences."
Joe Sipher, co-founder and Chief Product and Marketing Officer of Pinger, commented via e-mail to share the opinion that iAds can and will be a successful mobile advertising platform. Sipher explained "The integration with the iOS platform and the richness of the ad content make it attractive for both publishers and advertisers."
Sipher added "Google and Admob have lots and lots of advertisers. iAds has relatively few right now. That said, iAds advertisers are willing to spend more, whereas Google/Admob advertisers are more careful with their spending. The only obstacle Apple faces is the time it will take to get a wide range of advertisers. There's plenty of room for both Google and Apple to be successful."
Perhaps the higher click-through rate and longer periods of interactions from users reported by Nissan are a testament to the Apple creative process. Without Apple stirring the creative pot, it's possible that there would be more companies engaged and that the number of iAd campaigns would be higher, but it's also possible that they might be less effective as well.
Judging by what iAds has accomplished thus far, it seems that the advertising platform could actually be a tremendous success for both Apple and the companies that choose to advertise through it. If Apple can get out of its own way, and find a way to streamline the creative ad development process, it may even be able to go head-to-head with Google and AdMob and take a significant slice of the lucrative mobile advertising pie.