Will Apple’s iAd Change the Mobile Advertising Landscape?

Hostway Marketing - May 13, 2010

By Melissa J Luther

In early April 2010, Apple announced its newest “product,” the iAd. As with everything Apple, speculation ran rampant for weeks before the unveiling. What would it be? How would it work? Would it finally knock Google out of its dominant position in online advertising?

Unfortunately, the details are still sketchy and, since the service doesn’t launch until June, it will be a while before we can gauge the true impact.

What Is Mobile Advertising?

Mobile advertising is, quite simply, ads targeted at users of mobile devices. The market is still in its infancy, and mobile ads are a small percentage of total digital advertising. There is some evidence that consumers like mobile ads, with AdMob claiming click-through rates of 1-2 percent. This rate may have more to do with the novelty of the platform and is not a valid predictor of future performance, but it suggests the potential is huge if consumers continue to embrace it.

What Is iAd?

iAd is Apple’s answer to mobile advertising. The iAd network will embed ads into apps built for the iPhone and iPod touch and eventually also the iPad.

Embedding advertising in apps is already a reality, but Apple aims to do it better. The new iPhone’s upgraded 4.0 OS software will allow the ads to access all of the device’s OS features, including knowing your location.

The ad will appear as a banner across either the top or bottom of an app, which users can choose to ignore or open. When clicked, the ad slides open while the app slides out of view. When the ad closes, the app reopens where it left off. iAds will be distinguished from “regular” browser-based ads by a small iAd logo.

In theory, iAds will be helpful rather than intrusive, offering just the right product or service at the right time. GPS integration opens up the possibility of serving up ads from businesses near a user’s current location. It appears the ads will also be interactive, allowing one-click downloads. If true, the iAd network’s power may be the convenience it offers.

Apple has not yet made it clear how it will target ads/users, but at least initially, ads will not be targeted to individual apps.

How Can You Advertise With iAd?

For the moment, you can’t. Apple is looking for “charter advertisers” with “high-quality creative” to participate in its June launch, suggesting they want large, well-known companies for the kickoff.

Initially, an iAd team will build the ads in HTML5. Once the network gets rolling, there will be an iAd SDK (software development kit), and developers will get 60% of ad revenue. Once the SDK is released, ad agencies and app developers will be able to help businesses create their mobile iAds.

Although consumers have shown a knack for ignoring advertising of all kinds, the iAd looks promising, with the ability to deliver a useful experience to mobile users, rather than online ads repurposed for the mobile environment. If it works, it may very well change mobile advertising.

About the Author

Melissa J Luther, owner and founder of LookSee Information Solutions, LLC, helps small businesses create and maintain a strong Internet presence. She takes a multi-channel approach, with a well-optimized Web site as the center of an Internet presence that includes content creation, PPC advertising, linking and social media as appropriate.

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