Ad Sales Revolutionized – Again – The iAd

  • Posted by Steve Goldberg
  • |
  • May 14, 2011

On April 8th, Apple introduced a unique challenge to search (did anyone say Google?).  iAd mobile advertising, as CEO Steve Jobs explained, is “a new kind of mobile ad capable of delivering the emotional impact of TV advertising within applications.”

The iAd combines the rich, emotional experience usually attributable to high-end TV advertising with the interactive nature of the Internet – right there within the application without requiring users to exit.  If you don’t have to leave the app for the ad experience, and that ad experience is entertaining and engaging, you have a closed system that will command the attention of advertisers.

Think of it.  Users spend approximately 30 minutes per day using apps.  A recentMediaPost article  noted that Apple’s CEO Jobs projected delivering 10 ads per day per device, adding up to Apple serving 1 billion a day by year-end. (More than 185,000 apps are available in the App Store and more than 4 billion have been downloaded to date.) By comparison, Quattro before its purchase by Apple was serving 4 billion impressions a month, while AdMob delivers more than 10 billion a month.

As media recruiters, we are positive about this new advertising platform.  Advertising recruiters like my firm see candidates leaving jobs to sell for Apple, and we get to re-fill them our advertising sales candidates.  Media recruiting for Apple would be another cause for celebration for digital media recruiters.

As for the first impressions among agency executives, they were more mixed, some recognizing a new paradigm while others treating Apple’s venture into advertising as rudimentary and no match for the power of search.

But let’s not look only to the next 6 – 18 months.  Look beyond.  The world is going mobile.  It is much less expensive and more portable to have a smart phone rather than a laptop or PC.  As the world’s use of mobile increases, and there is no stopping this, and app developers become more and more creative, our digital experience will migrate more and more to our smart phone.

Will I need to use search engines as much?  As said by Sean Cummings, “search becomes less and less relevant. Actually, it’s not search that isn’t relevant to mobile but rather search engines as destination brands, as specific platforms for finding everything.”

Cummings goes on.  “I’m not looking at ads on the walls of the train. I’m not looking at the billboards driving by. I’m not looking at the product placement everywhere around me. I’m looking at my iPhone. On the golf course, I use Golf GPS. I don’t go to my computer to use Zipcar, I use my iPhone. I don’t go to Google maps on my computer before I’m going somewhere, I just head out and grab my iPhone and get directions on the way, and I’m not even the ‘bleeding edge’.”

Whatever their level of interest, if advertisers want in, they’re going to have to pay considerably.  Marketers are being charged a premium to maintain a presence on this new platform, according to the WSJ. initial rates are being set at 5-10 times higher than typical mobile ad rates and marketers who want to participate in the launch of the platform could pay up to $10 million.  Whatever the cost, it does not include the price tag more savvy advertisers are willing to pay to fund developers in order to capitalize on popular apps and the audience they will engender.

Welcome to the future, yet again.

Further details can be found at these links:

How iAds will revolutionize advertising

Apple Unveils iAd, iPhone 4.0