It has been almost five years since Apple started its mobile advertising, in 2010 to be precise, but it looks like the company might be putting a stop to it. iAds were impressive in that they were a sleek way to advertise on iPhone and iPad apps without having the user leave the app. However, leading CEO Tim Cook was quoted as saying in 2014, that iAds are a “very small part of the business”.
Instead, the company is shifting towards an automated platform that will be accessible to app publishers and advertisers. Previously, while the company was directly involved in selling and creating iAds, now it will no longer remain directly involved although the unit will still run in the same capacity.
The purpose of the iAd unit was to allow publishers to disseminate in-app ads on all iOS devices. iAd’s sales at one point were also used by Apple to attract advertisers to its free iTunes Radio service although it’s now replaced with Beats 1, which does not serve the same kinds of audio ads as the iTunes Radio. This means that as this change takes place and the unit becomes automated, it will allow publishers to keep 100 percent of the ad revenue. Since the iAd sales team no longer has a serving purpose, they will be offered buyouts.
It is clear that for Apple, it has been a struggle to establish iAds as a platform for mobile advertising. A spokesperson was quoted as saying, “we are just not good at it”. This new move from Apple validates that the company might have underestimated the effort required in establishing this line of business.
Sources near to company claim that it’s better that this decision has finally come forth and this is something, which should have been done a long while ago. The iAd network was nevertheless estimated to be worth more than $275 million one day, which is more than what the company spent on its advertising outfit, the Quattro Wireless.
What has put marketers off is the fact that Apple establishes strong opinions and tactics of its creative process, which essentially leaves little room for another’s opinion, blocking the lines for negotiation. In addition to that, the company also places a tight control over its marketing data, which prevents anyone from forming a smooth and collaborative alliance. One ad exec, opening up about Apple’s refusal to share data, told Ad Age in 2014 that, “makes it the best looking girl at the party, forced to wear a bag over her head”.
iAd only accounts for 5.1% of the share of the combined mobile display advertising revenue as of data collected and compiled by EMarketer in 2015. whereas on the other hand, shares of mobile advertising revenue of Google and Facebook account for 9.5% and 37.9% respectively.