iAd Is Expensive, But Will It Be Worth It?

Apple's plunge into mobile advertising with the launch of its iAd platform last month was a hot topic of discussion throughout the day at the OMMA Mobile 2010 conference Wednesday in New York.

While media buyers and marketers voiced enthusiasm for the forthcoming in-app ad format that Apple CEO Steve Jobs promises will shake up mobile advertising, others were not so sure it's that different from existing options and were skeptical about the $1 million minimum buy that Apple is reportedly seeking from brands.

But there seemed to be consensus that if nothing else, iAd will raise awareness of mobile advertising because of Jobs' stature and Apple's commanding position in the industry built on the iPhone, iTunes and the App Store.

Jeremy Lockhorn

Jeremy Lockhorn, head of emerging media at Razorfish, acknowledged that iAd and the cachet of Apple "will bring focus and a lot of new dollars and new players and that's going to be a good thing." But he questioned whether the rich media units Jobs previewed at the iAd launch in April were as revolutionary as the famously charismatic Apple CEO proposed. After all, they are based on ad formats developed by Quattro Wireless, which Apple acquired in January to gain a foothold in mobile advertising.



"Does iAd bring that much new?" he asked, noting that other mobile ad networks already offer similar rich media, in-app ad units. Fellow panelist Chad Stoller, executive vice president of digital strategy at BBDO, took issue with Lockhorn's downplaying of iAd's impact.

He suggested that the new platform will be "10 times" better than current mobile ad offerings, especially in its ability to connect to the iPhone operating system. "If I can get into the stack of the iPhone, "I'm very interested," he said. As an example, Stoller mentioned potential features like allowing someone to save ad content to an address book on the device.

But whatever iAd's capabilities, the $1 million (or up to $10 million to be an iAd launch advertiser) it is looking to charge brands for using the ad system also drew criticism. While agencies have been coy about the demands Apple is making in its road show for iAd, no panelists Wednesday disputed the very high figures that have been reported.

Alexandre Mars

"Apple is not treating agencies right," said Alexandre Mars, CEO of Phonevalley and head of Publicis Groupe's mobile arm, sitting on an earlier panel on the leading smartphone platforms. "Long-term, this is not the best way to interact with anyone. You can't work like this."

Wiley Mathews, U.S. mobile director at OMD, was more diplomatic, calling Apple's iAd pitch "an interesting offer." Despite the grumbling, most executives believed Apple would be able to line up a roster of big-name brands for the iAd rollout in July.

That doesn't mean the mobile landscape isn't still shifting. Android-powered phones outsold the iPhone in the first quarter for the first time, according to a report earlier this week by NPD Group. "Android is not messing around anymore,'" said Razorfish's Lockhorn, who added that Android's growing market share will eventually put downward pricing pressure on advertising on the iPhone and via iAd.

Even so, Google's Android Market still doesn't offer the quantity or quality of apps to compete with the App Store's 185,000 apps, according to Rachel Pasqua, director of mobile strategy at iCrossing. "Most of the innovative stuff [in the App Store] was created by passionate brand loyalists Apple has been cultivating for years, and Android doesn't have that," she said.

In the end, Michael Gartenberg, a partner at digital strategy firm Altimeter Group, said that consumers broadly -- rather than early adopters or pundits -- will decide which mobile platforms end up as the three or four ultimate winners in the space. "The issue of whether it's open or closed, or Flash versus no Flash, is a great debate to have if you're a geek like me," he said, but the mass market will have the final word.

4 comments about "iAd Is Expensive, But Will It Be Worth It?".
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  1. Jonathan Mirow from BroadbandVideo, Inc., May 13, 2010 at 12:55 p.m.

    "iAd Is Expensive, But Will It Be Worth It?" No.

  2. Adam Miller from Razorfish, May 13, 2010 at 3:55 p.m.

    "Does iAd bring that much new?" No Jeremy it does not.

  3. Edward Hunter from Loop Analytics, May 17, 2010 at 10:13 a.m.

    iAd is a box of mystery, wrapped up in hype and filled with already done. In-app landings for ads are nothing new, and furthermore, Apple is famous for it's capricious 'our way or no way' approach in treating vendors, allies, developers, etc. Why would anyone think they would treat brands or agencies any differently?

    Plenty of technologies out there, including ours, can do exactly what iAd can do and more.

    Still, you have to thank the folks out in Cupertino for putting this much long deserved limelight on mobile advertising.

  4. Elizabeth Kulin from ZEDO, May 17, 2010 at 12:06 p.m.

    Advertisers should be weary that Apple might not offer as much visibility, in performance tracking, as a certified technology parter can.

    ZEDO Marketing
    ZEDO Advertising Technology Partner for Publishers.

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