Apple’s iAd hasn’t received much in the way of attention since it’s announcement as part of iOS 4 almost two years ago. The platform was designed as a way for advertisers to create powerful interactive mobile ads and to make it easy for app developers to integrate those ads into their products. Of course, it was also intended to help Apple take a big slice of mobile ad spending.
Despite a big introduction in 2010, iAd quickly fell off almost everyone’s radar. Apple initially set a high barrier of entry by requiring iAd campaigns to commit $1 million. The company later cut that in half and this week lowered the required initial investment to $100,000 – one tenth of its original requirement – something that speaks volumes about the company’s mojo when it comes to selling ads.
iAd is a pretty impressive concept in that has the potential to present users with interactive mini-apps that can convey more useful information than the typical banner-style ads found in both iOS and Android apps. That should increase awareness on the part of users and deliver the potential for more actual ad-to-sale interactions.
Given the near-maniacal attention that Steve Jobs gave to advertising campaigns, it’s easy to see his hand in both the iAd concept. Unfortunately, it’s also easy to see his hand in the initial high price tag for using iAd. That over-valuing of the ad platform at its launch probably lost Apple some iAd clients who couldn’t afford it or didn’t want to invest so heavily in an unproven service. Given that rival services and companies, most notably Google, were happy to offer more proven and less expensive alternatives, it’s no surprise the iAd languished after its introduction.
There’s also an argument to be made that iAd’s iOS-only approach may have hurt the program as well. Although there are ad-supported iOS apps and ad-supported versions of paid iOS apps, they aren’t as ubiquitous as the are on Android where there’s a cultural expectation that most apps will be free.
In refocusing iAd this week, Apple didn’t just cut the required investment. It also increased the the percentage of ad dollars that developers using iAd receive to 70% (up from 60%). For advertisers, Apple as also moved to the industry norm of charging only for ad impressions (the ads being served to a user) as opposed to its original fee schedule that included charging for ad impressions and for click-throughs to other content or online sales. The changes may have been instituted by Apple’s new iAd chief and former Adobe executive Todd Teresi.
It’s tough to say how much impact the changes will ultimately have or if the initial perceptions of iAd as an expensive service will continue to keep advertisers focused on other mobile ad providers like Google and Millennial Media, both of which surpassed iAd’s use in the market.