iAd's revolutionary promise

Mobile is the undisputed champion of media across the globe with more than 4.1 billion people using mobile phones. That’s about six in 10 people, compared with less than three in 10 who access the internet through a PC. It is easy to understand why advertisers are excited about using mobile as a tool for marketing. The ubiquity of the mobile, combined with the ability to target, track, measure and reach people at key purchase decision points, quickly transforms into advertising nirvana. So why then is mobile advertising only expected to account for a paltry 2% of the digital media market’s spending in 2010 (according to eMarketer)?

Apple CEO Steve Jobs has the answer: “Because most mobile advertising really sucks.” He is right. Screens are small, which leads to disappointing creativity that makes it difficult for an ad to successfully compel a viewer to invest the time away from their current activity to click through. But Apple’s new iAd platform has these possibility to change that, at least for the projected 100 million Apple mobile device users.

It is a relatively small number of the total global mobile population, but as Jobs pointed out in his April presentation it is a very attractive demographic for advertisers. Furthermore, AdMob reported that the iPhone OS accounts for 50% of mobile web traffic and, in places such as Japan, Apple’s iPhone accounts for 72% of the smartphone market, according to Tokyo-based MM Research Institute Ltd.

With iAd, not only has Apple re-thought mobile advertising with the entire iPhone ecosystem in mind, but it has also drawn on its experience as one of the world’s most enjoyed brand advertisers, leading to several features that sets iAd apart. Users will come across iAd within an application. At first, the ad will look similar to the current small banners that are common, but the meat of the ad presents itself after a user initiates interaction.

Paramount to Jobs is that the iAd experience does not take a user away from their current app. Because of the new iPhone OS4 multitasking capabilities, a user can interact with an iAd without closing their current app and go back to where they left off when they are done with the ad. Jobs believes that if people don’t have to “pay the penalty of having to find their way back to their app” it will result in more clicks (or taps) for advertisers. An improved user experience may be just the thing the mobile advertising industry
needs to propel itself further into the plans and budgets of advertisers.

iAd intends to present advertisers a mobile ad platform with more impact, delivering “interactivity and emotion”, as Jobs puts it, by giving creatives a richer canvas to work with, blurring the line between entertainment, information, apps and advertising.

It sounds very promising, but there are questions and challenges.

One unknown is the quality of the metrics and data advertisers will be able to get on iAd campaigns. According to registered developers, there are restrictions on third-party targeting and measurement, which many
advertisers rely on for precise and unbiased information about their digital marketing.

All the data will flow through Apple, presumably on the technology that came with its recent Quattro acquisition.

Targeting will benefit from the detailed understanding Apple has about users from its iTunes and App Store behaviour, however, it is yet to be determined how well this approach will be received by marketers.

The iAd interactive and emotional experience is also not alone in the mobile
advertising market. Companies such as Medialets offer similar units, which also allow for rich and immersive creative.

Furthermore, while the number of Apple apps downloaded far surpasses any others, the Apple App Store isn’t the only game in town. Nokia, BlackBerry and others have moved into the apps distribution business. Then there is the price tag.

The Wall Street Journal recently reported that being part of the iAd launch could cost up to US$10 million, with regular campaign pricing eventually in the US$1 million range. There is no denying that Apple has proven time and time again its expertise at making technology simpler, fun and sexier. Apple has redefined categories so don’t be surprised if mobile advertising is next.

The author is Jason Kuperman, vice president, digital development, Asia Pacific, Omnicom group.