iAd 2.0: What Would You Tell Eddy Cue?

IAD-app

In the year and a half since Apple launched iAd, criticism of the company's rich media ad product for mobile applications has drowned out the initial fanfare. It started with the initial $1 million price tag placed on iAd buys and continued with complaints about Apple's tight control over the creative process, campaign analytics and the lack of information about where their iAds appear.

At the same time, Apple has faced growing competition from other mobile rich media vendors providing extensive campaign metrics, targeting capabilities and transparency -- all at a far lower cost. Apple has since responded by lowering the threshold buy, first to $500,000, and in July, to $300,000. It has also reportedly eased up on overseeing creative control and has released an iAd software developer kit (SDK) for developers.

In April, it even released an app showcasing iAd campaigns from advertisers including McDonald's, Ford, Nissan, and other high-profile brands.

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But iAd has clearly lost its early momentum, and Madison Avenue still has issues with the ad platform. With highly regarded Apple executive Eddy Cue placed in charge of iAd this month as part of his promotion to senior vice president of Internet software and services, it provides the opportunity for a reset. Think iAd 2.0.

In that vein, Online Media Daily canvassed agency executives about what changes they might suggest to Cue to rejuvenate marketer enthusiasm about the ad service. The recommendations generally reflect the criticisms directed at iAd in the last year, beginning with the pricing. Despite Apple's lowering of the minimum spend to $300,000, there is an interest in seeing that level fall even farther or be eliminated altogether, to open up the platform to more brands.

"There will continue to be marketers out there who are new to mobile and want to test first and scale based on performance," said Laurel Boyd, vice president, associate director of digital media for Mullen's mediahub. "It's less risky for them to run with other mobile companies promoting similar rich media capabilities that are device agnostic with no minimum spend."

She added that it still requires "a hefty non-cancelable spend" to take advantage of iAd.

When it comes to cost, Paul Gelb, vice president and mobile practice lead at Razorfish, said he is less troubled by the minimum buy than by CPMs for iAd campaigns. If Apple is charging 1 cent per impression and $2 per click on an iAd, campaigns can quickly become pricey. Assuming a mobile click-through rate of 3%, paidContent earlier this year calculated that an iAd CPM would run to $70.

"[Apple] has to work to either reduce price or provide more transparency or measurement that puts them on par with pricing compared to what they can get directly from publishers or other ad networks," he said.

Qualms about high CPMs tie back to frustration with Apple's stinginess with sharing campaign data. "You have [Apple] competitors providing more information about what publishers and what content the ad is being shown against, who the audience is, measurement of impressions and post-click behavior -- the key things core to a media planner's decision-making process today," said Gelb.

According to one executive, Apple only recently began allowing advertisers to use third-party Atlas tags for impressions and the first click, but no tracking on post-click activity. Agencies want Apple to go much farther. "It would be great if Apple could provide extensive metrics tied to our clients' KPIs (key performance indicators) since that's been a key reason for low mobile spending," said Vik Kathuria, managing partner, corporate strategy/digital investment, at MediaCom.

One key advantage that Apple would still appear to hold over rich media ad rivals is its wealth of targeting data. When iAd was unveiled, the company touted the ability to tailor ads to iTunes account holders based on their tastes and habits in apps and other digital media.

But Gelb said the iTunes-based targeting isn't yet ready for prime time. "That's a great long-term proposition, but in the short term, it takes some time to build that up," he said -- "figuring out what's the best app and person and time for an ad based on their previous app and content consumption."

One way that Apple could work more closely with Madison Avenue to demonstrate the effectiveness of iAd is to jump in the pool, according to Tracey Scheppach, senior vice president/innovation director at Publicis' VivaKi unit in Chicago. Its so-called Pool initiative last month revealed tablets as its next "lane" -- or area of advertising research. Tablet lane participants include ABC Television Network and Bank of America.

"We have several advertisers that have spent millions on iAds and one of the big challenges is nobody knows if they are any good," said Scheppach. "We would love to have [Apple] in the pool. There is a need to develop standards that are proven through consumer research."

At least one veteran tech industry observer thinks the newly promoted Cue could be the one to take the plunge. "Eddy is clearly one of the guys who could be a troubleshooter," said Tim Bajarin, president of technology consulting firm Creative Strategies. Cue has built a strong reputation as a manager and dealmaker as head of iTunes and the App Store.

"I think Eddy in this new role is going to listen very carefully to what agencies want and need," said Bajarin, who added that Cue taking over iAd indicates that Apple considers it a priority. By integrating iAd more tightly with its 225 million iTunes accounts and wider technology ecosystem, he believes "there's still lots of room for them to maximize this platform."

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