Will iAd generate iAdspend?

POSTED BY Global Administrator
Ah, April. The cruellest month, Eliot called it; well, it’s usually the month that Liverpool’s interest in the Premier League comes to a sad end, but the club spared me that perennial upset by opting out of the title race by Christmas. But there are other constants to remind us of the season: birds making nests; hyperactive, chocolate-fuelled children rampaging round the house during the Easter holidays; Apple announcing a new OS for the iPhone. And, much as I’d like to use this blog to indulge my fondness for ornithology, or to expound at length on the exploits of my various kids and step-kids, neither subject area is really pertinent to mobile. So let’s turn our attention to the iPhone OS 4.0 or, more specifically, iAd. Following January's announcement that Apple was acquiring Quattro Wireless, it was clear that the company would be seeking to integrate advertising into its next OS release, and iAd is the result.  The platform displays full-screen video and interactive ad content within the app; Apple said that it allows developers to embed iAd opportunities within their apps, while the ads are dynamically and wirelessly delivered to the device. Apple will sell and serve the ads (which will be marked with an iAd/Apple logo), and developers will receive 60% of iAd revenue. In the short term, Apple itself will also build all of the ads in the network (using HTML5), although it will release an iAd SDK at some point in the future. On the surface, this has the potential to do for mobile advertising what the iPhone and App Store combo did for app downloads: brands have already been seduced by its marketing potential (and in the case of retailers, by the possibility of extending m-commerce through a downloadable app). Indeed, such has been their infatuation with it that some digital agencies have spoken of their exasperation with the clients when they focus on an iPhone app above other mobile distribution channels, and thereby ignore the ninety nine per cent or so of the market that doesn’t have an iPhone: they also point out that in many cases their client’s demographic won’t necessarily be that which purchases an iPhone in the first place. Given that Apple will be preaching to the converted, then – allied to a more measured, positive response to mobile advertising in general, resulting from a mindshift which now inclines more to engagement than overall reach – expect to see Apple providing us with some eyebrow-raising data on response rates before too long. However, not everything in the iPhone advertising garden is rosy. Apple has recent updated its “iPhone Developer Program License Agreement” which includes new rules prohibiting developers from disclosing “device data” (including download levels, response rates to campaigns, etc) to a third party without Apple’s prior written consent: “Accordingly”, the rules state “the use of third party software in Your Application to collect and send Device Data to a third party for processing or analysis is expressly prohibited.” This could well prevent advertisers drawing on analytics firms such as Flurry and Localytics. Given that, for marketing/advertising apps, such third party software may well be a prerequisite for the app to be created – after all, its purpose will be to measure end user response in some way, shape or form – then the flow of such apps for the iPhone may be adversely affected. Indeed, Sarah Perez has argued not only that “it could spell doom for mobile analytics and ad firms, especially the small-time players beloved by independent developers” but that Apple’s terms could possibly be anti-competitive. Arguably, though, the most interesting facet of Apple’s foray into the mobile advertising space will be the mobile industry’s response to it: it was caught cold with the App Store launch, but with Apple having flagged its intentions four months ago (that would be the $275 million flag it waved at Quattro having been beaten to AdMob by Google), its competitors should at least have realized that they will have to raise their game if they are to benefit from an upsurge in interest in mobile advertising that occurs post-iAd. Let me repeat: should. Whether they will is another matter entirely…