When Apple announced iAd, its first advertising platform, it set the stage for a massive showdown with Google over the lucrative advertising opportunities in the mobile app space. But while the iAds that have launched have been successful, according to early reports, offerings on the iAd platform have been scarce so far, and Apple’s close control of its iOS platform is reportedly to blame.
Out of 17 iAd launch partners, only five have actually managed to roll out iAd campaigns in the month and a half since Apple's iAd announcement, as the Wall Street Journal points out: Citigroup, JC Penney, Nissan, Unilever and Walt Disney.
To be fair, some of the companies that have managed to launch iAds say they are happy with the results. A Nissan spokeswoman told the WSJ that its Apple iAd "has driven exceptional results to date" and that its Nissan Leaf iAd, which encourages users to shake their iPhones in order to change the color of its electric car, generates five times the reaction as equivalent banner ads have done. And Unilever, which is advertising Dove soap to men through male-centric apps, described the results of its iAd as "amazing."
Still, 12 of Apple's iAd launch partners have yet to launch, more than a month and a half after the announcement. Advertisers usually get to design their own ads, but in the case of iAd, they need to cooperate extensively with Apple, which apparently makes the process more tedious than usual.
Apple’s penchant for control is notorious; as other companies have embraced openness and collaboration, Apple takes the opposite approach, implementing ideas in a top-down way, maintaining strict secrecy over its products and strategy, and refusing to license its operating systems to third-party hardware manufacturers, the way Microsoft did on the desktop and Google is doing with Android.
iAd is not the only new initiative that Apple has slowed by demanding control over design and functionality. When iTunes LP and iTunes Extras rolled out, offering record labels the chance to sell premium full-length digital albums and digital bonus materials through iTunes, only Apple was allowed to create the packages at first. It later released developer tools with which artists and labels could create their own designs.
Assuming iAd follows the same trajectory, Apple will make similar tools available to its advertising partners so that they can make their own ads following Apple’s guidelines. But the company appears to be in no rush to roll these ads out, or a developer kit to streamline the process, because it knows how important advertising will be on its smartphones and other devices that A) run Apple-approved apps, and B) often know where a user is and what they are doing.
Executives from the companies that have worked on iAds so far told the WSJ that creating an iAd can take as long as 10 weeks, and that Apple has taken two weeks longer than expected to build the ads. Once created, the ads are inserted into ad-supported apps, giving developers a way to make money without charging for their apps. the app developers receive 60 percent of the advertising revenue, while Apple claims 40 percent in return for having built the ads and the running the iOS ecosystem where they appear.
iAds are the opposite of Google search ads in the sense that Apple requires a commitment of at least $1 million from advertisers, while Google allows even the tiniest companies to place ads for a few dollars. But for companies that can afford the time and money it takes to create an iAd, the program appears to be paying off.
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