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Apple iAds, The Future of Paid Advertising?.

The author

Epiphany Search

In the world of paid advertising, it’s fair to say that at the moment, Google is king. Could you therefore be forgiven for not exploring any other platforms in which to conduct your paid advertising campaigns? Not really in my opinion. Google may be king at the moment, but will their reign last forever? Technology is constantly changing, and the online engagement users expect will change along with it. Will traditional text and banner adverts that have worked so well for years, still entice users in the same way they once did? Will users predominantly still use their desktop or laptop computers to browse the Internet, or will more and more begin to make the switch to powerful smartphones like Apple’s iPhone?

In the world of paid advertising, it’s fair to say that at the moment, Google is king. Could you therefore be forgiven for not exploring any other platforms in which to conduct your paid advertising campaigns? Not really in my opinion. Google may be king at the moment, but will their reign last forever? Technology is constantly changing, and the online engagement users expect will change along with it. Will traditional text and banner adverts that have worked so well for years, still entice users in the same way they once did? Will users predominantly still use their desktop or laptop computers to browse the Internet, or will more and more begin to make the switch to powerful smartphones like Apple’s iPhone?

We can never be certain with 100% accuracy how user behaviours will alter over time, which as a PPC analyst makes exploring the potential of other advertising platforms all that more important. This brings me on nicely to discussing Apple’s new mobile ad platform ‘iAd’. iAd officially launched on the 1st of July with the aim of revolutionising the way mobile advertising currently works. Apple have recognised that the way users browse the Internet on desktop computers, differs massively to way they interact on their phones (particularly smartphones). To try and serve the same styles of adverts that work well in traditional desktop-style search, on a mobile phone, just won’t have the same impact, predominantly, because users expect a different type of interaction. A hypothetical example: You need to renew your car insurance, and decide that you’ll use the Internet to hunt out the best deal. Do you run a search on Google using your iPhone for ‘car insurance’? Possibly, but unlikely – you know that you can browse full websites on your iPhone, but navigating the site and filling out all the details on your phone puts you off. You’d be more likely to use your desktop PC to make that same search. However, what if there was a custom-designed car insurance price comparison app on your phone that simplified the whole process? This app would allow you to fill out details quickly and easily and return quotes from the simple application. A much more likely possibility than option one. It is this mentality that Apple is looking to take advantage of – the growing popularity of apps. There may become a point where large businesses will need to look to design user-friendly apps to complement their existing websites. Many are already doing this – some of the big banks for example now have apps allowing you to view your balance, pay bills and transfer money as they recognise that usability of their existing websites on smartphones isn’t good enough. So most importantly, what exactly is iAd and how will it work?

  • iAd is an ad network exclusive to Apple users where adverts are displayed within Apps from the app store. It works on iPhone/iPod touch devices using new Apple OS 4 released in July and will be due for iPad launch in Autumn
  • Ads display as banners within existing applications that have opted into use iAd
  • Ads are in effect links to mini-branded applications that can be games, applications, ecommerce shops that load like an additional app upon click.
  • The platform is likely to make use of use of technology from mobile ad network Quattro Wireless that Apple acquired (http://www.quattrowireless.com/mobile_insight/blog/happy_new_year_from_quattro_wireless) in January.
  • Apple will self-serve the ads with 60% share going to the app developer opting to use iAd within their app and the other 40% going to Apple.
  • It’s being trialled at this stage with big brands in the USA such as Disney, Nike, CitiBank and Nissan (who have been given exclusivity in their industries to start with).
  • There’s no firm indication at this stage what the pricing model will be – whether it’s going to be a CPM or CPC model. Early rumours are that Apple could well be charging $10 per 1000 impressions of banners and $2 a click on top of that.

Now these ads are completely different to anything we’ve seen before. As Apple quote themselves: “iAd offers advertisers the emotion of TV with the interactivity of the web.” Seeing however, really is believing, so here’s a couple of examples by Nike and Nissan which really highlight how iAds will work.
I think it’s hard to argue that these types of adverts aren’t pretty cool. But I know what the majority of you are now thinking.. that’s all well and good for huge multinationals like Nike and Nissan that have massive marketing budgets to invest in areas like this, but how would it work for more mainstream advertisers with smaller budgets? Well, clearly iAd is quite exclusive at the moment, but I wouldn’t expect this to last. There will become a point where the platform becomes a lot more mainstream as the technology and resource skills needed to make these types of adverts takes off even further (thus driving the price down).  Just think how many people own smartphones already – can you imagine how many more users there will be in even 1 or 2 years time? With the technology trend moving further into the smartphone era, there may become a point with advertiser have to look towards this type of paid advertising or lose out on a huge chunk of potential business altogether. It also represents a huge opportunity for those developing the apps themselves. With 60% of click revenue going to the app developer, there may be an even greater shift in companies creating popular apps (and promoting them) just to take advantage of the revenue streams iAds can bring in. I’m not saying I know what the future of paid advertising will be for certain, but the signs point towards mobile advertising being a big part of it, and I for one want to be ready and excited about it.