Apple Retools iAd, But Is it Enough?

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Apple’s mobile ad platform, iAd, has been faltering, and losing market share. Apple is introducing some changes designed to make iAd more competitive, and regain some momentum, but it might not be enough.

Apple has a lucrative and valuable mobile audience with its strong position in the smartphone market with the iPhone, and virtual monopoly of tablets with the iPad. The dominance of iOS as a mobile platform gives Apple some leverage in mobile advertising.

Apple iAd is not the only game in town, just the most expensive.
iAd has managed to capture about 20 percent of the mobile ad market, and iAd campaigns seem to be relatively successful. But, the lofty costs of iAd and tight control exercised by Apple push many would-be customers away.

To attract more mobile ad business, Apple is lowering barrier for entry by dropping the minimum campaign cost from $500,000 to $400,000. It is also helping advertisers control how the iAd budget is spent by implementing a cap on the per-tap payments.

Michael Chang, GM of Greystripe, offers some insight on the Apple iAd changes. Chang says that dropping the minimum campaign to $400,000 will have little impact because the majority of mobile campaigns fall in the range of $50,000 to $200,000 and Apple is still pricing itself out of the market.

The other challenge facing iAd is its Apple-centricity. Advertisers don’t want to be forced to create and manage separate programs for the same marketing campaign. Chang explains, “Over time, iAd will see pressure from integrated online and mobile players, like Google and our parent company, ValueClick, where buyers have a one-stop shop for audiences across mobile platforms like android and iOS, plus online--something that iAds doesn't do today."

The changes Apple is making definitely lower the bar, and make it more inviting to a wider range of mobile marketing customers. But, they are small concessions that still leave iAd more expensive, and more restrictive than rival mobile ad services.

As with anything, though, you get what you pay for—and Apple has a history of providing quality over quantity. As long as iAd can deliver engaging ads that attract the attention of the mobile audience, it will attract mobile marketers willing to pay for that service.

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