Starting in September, Apple will focus its mobile advertising efforts entirely on the iAd, which runs ads in applications on the iPhone and iPod. As a result of that decision, the company is shutting down the Quattro Wireless mobile ad network it acquired in January for $275 million.
In a statement posted on the former Quattro home page, Apple said it will no longer accept new campaigns for the ad network and will wind down existing campaigns across different devices and platforms. "As of September 30, we will support ads exclusively for the iAd Network," read the notice.
That Apple has eschewed running a horizontal ad network to concentrate solely on ramping up the iAd platform launched in April isn't terribly surprising. With the company's high ambitions for the new interactive format and commanding position in mobile apps, it's become clear Apple is betting everything on the iAd to succeed in mobile advertising.
And after enticing a roster of blue-chip brands to sign on as charter iAd advertisers at least $1 apiece, Apple likely needs to turn all its Quattro resources toward preparing and running campaigns for its new batch of clients. A recent Wall Street Journal report indicated that the service has been hampered by campaign delays, with at least one announced partner, Chanel, shelving its iAd effort.
"I think it all comes down to resources," said Phuc Truong, who leads mobile marketing efforts in the U.S. for Mobext, the mobile marketing arm of Havas Digital. "Given the focus they've chosen, Apple must have a very rosy view of where demand for the iAd is going." He added that Mobext's planned iAd campaign on behalf of Sears is on track but has a longer lead time than some others.
Besides any woes Apple is experiencing with the iAd rollout, competing mobile ad networks also stand to benefit directly from the demise of Quattro. Prior to its acquisition, the company had a 7% share of the U.S. mobile ad business with $21 million in revenue, according to one estimate from technology research firm IDC. Other ad networks could now pick up some of that business.
"This will create new opportunities for other ad networks, especially for inventory Apple represented on Android devices," said Boris Fridman, CEO of mobile ad technology provider Crisp Wireless. He suggested mobile publishers have already been looking to switch to other mobile ad networks because of a loss of confidence in Quattro as a cross-platform ad network.
Truong agreed competing ad networks like Google's AdMob or Millennial Media could gain from Quattro being shuttered. "The fact that a pretty big player is now out of that game, gives them more share," he said. "There's one less competitor out there."