iAd – Post Launch Update

8/7/2010

iAd – Post Launch Update

8/7/2010

iAd – Post Launch Update

Prior to its launch Mindshare provided a POV on what the launch of Apple’s iAd

system would mean for mobile marketing, and digital marketers in general; in it we

discussed the game-changing nature of a company like Apple entering the

advertising space, and the exciting new opportunities the platform was likely to

open up to brands.

Now, with the system live we thought it would be worthwhile looking at whether

the reality has met the hype, and whether our hunches were right.

Click-through: iAds will enable users to click on ads without leaving an app,

hopefully increasing consumers’ willingness to interact with advertising.

Apple feel this will increase CTR and we would tend to agree:, however it

seems likely that, as with most other new ad formats, this will drop over

time, though hopefully brands will be pushed to be provide more engaging

content, thereby limiting the effect of ‘format fatigue’.

In-App Engagement: iAds allow much more creative in-ad experiences,

similar to web-based rich media, thereby increasing engagement. The

challenge for brands will be to illustrate the engagement available through

the delivery mechanism of a small mobile banner.

Creative: Apple is currently producing iAd creative for advertisers to ensure

it meets Apple’s creative standards. For now this is an added service to

advertisers, but if Apple starts to charge (which seems likely) they may

decide to maintain this monopoly which is unlikely to allow price efficiencies

to develop; our hope is that Apple will decide to open up creative

productions to the wider industry.

Branding: To allow consumers to differentiate iAds from other in-app ads,

there will be an Apple logo on all ads. At present it is impossible to tell

whether this will lead to higher CTRs or whether it will work to combat the

effects of ‘format fatigue’: the worst case scenario is that the logos actually

lead to this fatigue, as consumers start to associate them with advertising

they wish to avoid: brands will need to work hard to ensure that this doesn’t

become the case.

8/7/2010

iAd – Post Launch Update

Pricing: Apple has created an entirely new pricing system for iAds: a mixture

of CPM for impressions and CPC for clicks. This means advertisers and

agencies are faced with a model that doesn’t fit any of their existing billing

or planning systems – expect to see friction as Apple is pushed to change,

something it isn’t renowned for doing.

Targeting: Apple plans to use its iTunes data to allow advertisers to target

ads at audiences. Whilst this is a large step in terms of what has been

possible with mobile advertising up until now, it also raises a couple of

potential issues:

o It means that advertisers are paying premium prices for what is,

essentially, a blind/network buy: compared to the traditional web this

is a big change.

o Facebook’s recent travails have shown that consumers are starting to

feel privacy, and a suggestion that Apple is using personal data could

lead to criticism from consumer groups.

Portability: Perhaps unsurprisingly, Apple will not allow iAds to feature on

any other operating system. Unfortunately this means that iAds will be

another format that advertisers will have to produce, leading to increased

costs and extended planning schedules.

Scale: At present iAds are only available on later versions of iPhones and iPod

Touches, with iPads to come soon. Whilst those devices have been very

popular, they still don’t offer the scale many advertisers will require. With

Apple promising large returns advertisers will need to consider frequency

caps, though it may be that the rocketing success of the iPad and iPhone 4

will cancel out this issue.

Measurement: At present there is no standard for measuring success on the

iAd platform. If advertisers are expected to part with serious budgets, which

they are, this is a situation that will have to be resolved.

To conclude then, iAd offers advertisers exciting opportunities to trial new

methods of connecting with consumers but, as with most developments heralded

8/7/2010

iAd – Post Launch Update

as revolutionary, there are still a number of potential issues that advertisers should

be aware of.

What is certain is that as with most Apple launches, iAd continues to generate large

amounts of coverage and early adopters should certainly see a halo effect, no

matter what.

Ciarán Norris, Head of Social Marketing:

Original iAd POV written by Tamsin Hussey & Adam Gerhart.