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The iAd: Steve Jobs Regifts The Mobile Marketing Experience

By - May 10, 2010


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We’re used to buzz around Apple, and in particular, we’re quite used to buzz about how Apple goes to market. CEO Steve Jobs is widely considered the greatest marketer alive, and nearly every marketer I’ve worked with has expressed sincere admiration for the magic the man is capable of weaving. His products are brilliant, and the cult around Jobs and his work are extraordinary.

But with iAds, Apple has moved from the business of making ads to the business of selling them. And in the past month or so, Apple’s new team – folks formerly known as Quattro Wireless but now sporting brand new Apple business cards – have started making sales calls at a handful of major brands and their agencies.

These freshly minted Apple folk must feel like the won the lottery – just a few months ago, they were duking it out with ten other mobile networks, competing on price, ROI, network quality and scale, ad format, and Lord knows how many other factors. Now marketers are literally lining up to buy into the launch of Steve Jobs’ next great thing.

And that next great thing is called iAds – which Jobs, in typical fashion, introduced last month as the answer to all those mobile ads that “suck.”

I guess he means what those folks from Quattro sold (and still do, by the way, under their original brand name). Because from what I can tell, there’s almost nothing new in iAd, save the wrapping paper.

Then again, wrapping paper is what takes an ordinary object and turns it into a gift, and therein lies the genius of Jobs.

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You won’t find anything about iAds on Apple’s site (there are a few for “iAd,” but if you’re trying to understand what they are, you’ll be disappointed). Instead, details about the program are leaking out through blogosphere speculation and reports of recent sales meetings. I’ve spoken to several folks who’ve been in those meetings, and this post, the first of a series, will be my best attempt at making sense of the iAd narrative.

And it’s quite a classic tale – one most of the press is eating up. Early reports echo Jobs’ points about how iAds are different, but fail to check whether, in fact, iAds do anything particularly new.

Apple’s press release reads: “iAd, Apple’s new mobile advertising platform, combines the emotion of TV ads with the interactivity of web ads. Today, when users click on mobile ads they are almost always taken out of their app to a web browser, which loads the advertiser’s webpage. Users must then navigate back to their app, and it is often difficult or impossible to return to exactly where they left. iAd solves this problem by displaying full-screen video and interactive ad content without ever leaving the app, and letting users return to their app anytime they choose.”

Jobs elaborated at launch, claiming that iAds would bring more “emotion” and “engagement” to what was before a noisy and crap filled environment.

Well, yes and no. Yes, in that iAds are *only* rich media experiences (once you click on a standard banner, of course). And yes, in that Apple is controlling all the creative for iAds (clients will have approvals and submit materials, but Apple alone is doing the actual development – to ensure quality control – and most likely, to maintain the mystery of iAds in general. Classic Jobs).

And yes, in that at launch, only a selected few marketers will be “allowed” to run iAds. And as has been widely reported, those brands have to pay quite a price to get into the launch portion of the program. Given the steep price tag (reportedly up to $20 million, and I’ll be getting to that in a follow up piece), it’s almost a certainty that the ads will be of high quality – only the most established brand marketers are going to play at this level.

So yes, the actual ads inside an iAd will be better, in general, than an “average” mobile ad experience. But then again, a Superbowl ad is generally better than an “average” television ad, ain’t it?

So…. no, there’s nothing new here. Anything you can do with an iAd, I’ve confirmed with numerous very knowledgeable sources, you can do with AdMob or any number of other networks.

While it’s true that a lot of mobile ads link to web sites, rather than to rich media experiences that keep the user inside an app, it’s also true that AdMob, among others, has been using what’s known as a webview (using the video friendly HTML5 standard) to deliver exactly what Jobs packaged as “new” since at least last Fall. And let’s not forget, Jobs failed to buy AdMob, which was his first choice – Google won that bidding war.

And given that AdMob has 70% reach into the iPhone/Touch/Pad world (according to the company), Apple isn’t really selling anything new with iAds. In the words of one agency source who recently sat in an Apple pitch meeting: “iAds are the same thing you could get before, wrapped in a nice box with a bow on it.”

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Ahh…there it is: The gift. Steve Jobs’ brilliance lies in his ability to make everything seem magical. The true gift Apple is selling right now? A Golden Ticket into Willie Wonka’s Chocolate Factory. A chance to be associated with the greatest marketer in the history of the industry.

Think I’m kidding? Then consider this: Apple is telling marketers willing to pony up for the launch that Steve Jobs will mention their brand on stage as he launches iAds this summer. “That is worth a hell of a lot,” one agency chief told me.

That, my friends, is the bow on the box. The box itself? That’s Apple products – the environment in which the advertisers’ message will be seen. And marketers like nothing more than to be associated with quality environments.

In fact, during presentations to prospective clients, Apple’s sales force takes out an iPhone to demonstrate what iAds look like. And here’s the kicker: They unveil the phone with a flourish and utter these magic words: “This is actually Steve Jobs’ personal iPhone.”

They may as well be showing Willy Wonka’s cane to a room full of children.

What Apple is selling with iAds is – Apple itself. As well they should. But they are also selling into a marketplace that, for the most part, doesn’t really understand mobile marketing. The market is still relatively small – well under a billion dollars globally this year – and major marketers have yet to embrace the format. They don’t realize that most of what Apple is pitching them can be done already.

And in the end, it doesn’t really matter. By isolating the rich media execution and claiming it as his own, Jobs has once again identified a marketing opportunity and redefined it as unique. In the process, he’s driving innovation and awareness in the mobile market. Nothing wrong with that.

But if I were a marketer considering laying out $1mm, $10mm, or more on iAds, I’d make sure I understood what my goals are.

In my next iAd-related post I’ll be focusing on just that topic: deconstructing the ROI on an iAd. Because once the launch is over, it’s all about value for money spent. And there are a lot of unanswered questions here – including publisher inventory and terms, blind vs. directed networks, targeting and terms of service for use of iTunes data, issues of third party networks, FTC regulation, and other policies, and much more. Stay tuned.

Update – I should have mentioned that there are at least two unique properties to an iAd that you can’t get elsewhere – the targeting, which reportedly is based on what apps a particular user has downloaded from iTunes, and the “ViP” program, which is, in short, the ability to link directly to your app in the iTunes store. Of course, anyone can link to the iTunes store from an ad, the difference here is this is a “proprietary Apple approved link.” Not sure what that means, but it should become clearer when the program is live in the wild.

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25 thoughts on “The iAd: Steve Jobs Regifts The Mobile Marketing Experience

  1. ComboApp says:

    I would really like to hear Steve Jobs’s personal response on this post, but I realize it will never happen….

    Perhaps this summer will be a good chance to ask the question about iAd at D8 and get a straight answer?

  2. jimjerky says:

    Crickets…

  3. Bryan Christmas says:

    Not sure how the marketing dept works at Federated, but isn’t decommoditizing remnant inventory kind of the whole point of an ad network? (kind of like computers or phones!) Going above and beyond with whipping out “Steve Jobs’ actual iPhone” in sales meetings, mentioning the client brands onstage, and promising that you can’t get what they’re offering ANYWHERE else just sounds like successful salesmanship to me. I’m sure I don’t have to tell John Battelle of all people that without some bullshit, you’re not going to have much of an ad net… we can’t really be mad at Steve for being a quick study.

    There is also a very legitimate value add with the targeting, as you hint at but don’t go into full detail on. Apple has now restricted access to the most valuable audience data in their API, so things like geolocation and probably demo stats from users iTunes accounts are only available to iAds.

  4. Eye says:

    Huh? Were you high or being an utter shill when you wrote: “Anything you can do with an iAd, I’ve confirmed with numerous very knowledgeable sources, you can do with AdMob or any number of other networks.”

    iAd will do quite a few things that differentiate it on a major scale from its competitors:

    Localization: Unlike iAd, AdMob and any other the other services will not have access to CoreLocation meaning very local, very targeted advertising will not be available to other networks. Using CoreLocation a restaurant in Aspen Colorado will be able to target those people visiting the town. A pre-school in Corpus Christi will be able to target people using parenting apps in a specified radius of the school.

    Metrics: AdMob and any other the other services will not be able to send information back to their servers, so they’ll only be able to track click-thrus as people hit their website, not click percentage or impressions.

    User data: AdMob and any other the other services will not have access to Apple’s user database. iAd will be able to associate that you purchased a Lady Gaga track or the Marvel comic book app on iTunes and thus serve you an ad for Lady Gaga concert tickets or Iron Man 2 based on targeted interests.

    User-friendliness: I won’t click any ads right now because they take me out of my application into a website that usually sucks and make it a pain to get back to where I was in my app. AdMob and any other the other services will not be able to offer that level of user-friendly integration.

    What this means in practical terms is that shortly after the release of iPhone OS version 4, is that iPhone developers will abandon AdMob and any other the other services in droves for iAd, especially if Apple offers better pay rates (and if Apple is puling down $20 million a pop that’s almost a guarantee). Given the iPhone’s much more affluent demographics than other phones afford advertisers, advertisers with money will target iAd and leave the AdMob and also rans with advertisers of the sort who fill up FoxNews.

  5. John says:

    @Eye -

    Thanks for the comment. Let me respond.

    1. Localization. Really? Only iAds have this? And are you sure it does? I am not, but I’ll check into it. No one I spoke to mentioned this as part of Apple’s pitch, and it’s not in the announcement. If that’s true, that’s a major distinction. But somehow I doubt it.

    2. Can you unpack this? They ‘can’t send information back to their servers’? Why? I highly doubt this is true. But if it is, I’d like to know why.

    3. You are right. But user data leverage is a two way street, a double edged sword, and totally unproven for Apple at this point. See my next post on ROI. Oh, and btw, when you downloaded your last iTunes movie, did you know it was going to be used to target you? Are you OK with that? It’s fine with me, but no one, so far, has asked me for permission.

    4. You kind of missed my point. Using webview and HTML5, the iAd experience is available on a lot of networks already.

    Will ask others to respond to some of this and appreciate your taking to time to comment.

  6. ivv says:

    I sat at what must have been among the first pitches by the iAd team to the agencies. My post about it is linked under my name.

    1. Nobody said that the iPhone that was passed around was Jobs’s.
    2. iAd’s targeting based, as you said, on iTunes data, is pretty unique. To me, it’s also its biggest advantage over other networks.
    3. I got the impression that the location targeting would be available.

    In a nutshell, iAds are rich mobile ads with interesting targeting options that will attract a lot of developers because of their premium pricing.

    I don’t easily buy the whole “emotion” argument, though, and look forward to the ROI post.

  7. Mike says:

    I’d like to see what market share iAds can command, and it’d be interesting to see how Google and Apple battle it out. I’m sure this market is going to expand a lot as mobile phone mania continues to increase. But you’re right that Apple aren’t doing anything new but just dressing it up nicely.

  8. Craig says:

    @John

    In point #2, I think Eye was referring to the clause in the developer agreement for OS 4.0 that seems to ban iPhone apps from transmitting data that third-party ad networks

  9. John says:

    Thanks ivv. Did anyone tell you what actual inventory was in fact available? Because that’s a pretty big unknown. As for location, I’ll dig in. And I’ve had four different folks, two clients, two agencies, confirm the iPhone of Jobs story. Maybe they didn’t have it for your meeting!

  10. Justin says:

    Before you finalize that last post on iAd ROI, be sure to check out Fluent Mobile’s work… they are pioneering ASO (App Store Optimization) and have been able to achieve what I think most brands/publishers want and need… a cost effective way of generating positive ROI for mobile ad campaigns that involve the App store.

    In some ways this creates a Super VIP program without the exorbitant pricing associated with the Apple premium. Will be interesting to see ASO emerge as key component to marketing mix just as SEO & SEM.

    It works and it works well… how else would a non-branded news application consistently win the daily download wars in a competitive category…

    Apologies for the long URL, but iTunes doesn’t allow use of a shortener… http://ax.itunes.apple.com/WebObjects/MZStore.woa/wa/viewTop?id=25228&popId=27&genreId=6009&ign-impt=clickRef%3DSubGenrePage-US-News-6009-Top%2520Free%2520Software-Title

  11. Tamara says:

    Thanks for pointing out that a lot of what is “new” here comes from the advantages Apple has by controlling the eco-system. Mobile rich media has come into play in the last year and differentiates brand advertising from performance advertisers, such as app developers and mobile content providers, that you find so prevalently in mobile apps. Even ad networks like Admob offer in banner video ads and rich media vendors like my company, Crisp Wireless, offer rich media experiences that bring more functionality into the ad itself instead of bumping you out to a browser or a microsite. Crisp offers location-aware, tap to video, expandables with data input, dynamic ads with social networking feeds, and more. There are definitely still question marks on exactly what inventory will be available with iAd. When it comes to ROI, I’d be happy to talk further about what can be measured in mobile rich media — both on the mobile web & mobile apps.

  12. Lars Pallesen says:

    John, before you sat down to write this article about iAd, did you take the time to actually see Steve Jobs’ own demo of iAd?

    http://www.youtube.com/watch?v=q7WVt63S49s&feature=related

    That should have cleared up a lot of your confusion about the iAd concept.

  13. John says:

    Lars, yes. And that’s what I am responding to, in essence, as well as the selling approach of Apple.

  14. Lars Pallesen says:

    If that’s the case I wonder how you can defend saying this:

    “There’s nothing new here. Anything you can do with an iAd, I’ve confirmed with numerous very knowledgeable sources, you can do with AdMob or any number of other networks.” ?

    Could you please point us to just one add from AdMob or “any number of other networks” that looks anything like the three iAds Steve Jobs was demonstrating?

    If you can’t, then maybe one of your “numerous very knowledgeable sources” would be kind enough to name an example? Just one will do.

  15. John says:

    Lars, it’s HTML5 and a webview. That’s what it is. If anyone from Admob or Medialets or whoever is (still) reading, please send some examples. Thanks.

  16. Lars Pallesen says:

    I’ll take that as a no?

    You feel comfortable claiming that “there’s nothing new here” about iAd, and yet you can’t come up with one single example of an ad that looks and works like an iAd? Wow.

    Guess I’ll have to wait for AdMob or one of your “numerous very knowledgeable sources” to come up with proof for your claims then?

    Anybody?

  17. John says:

    Lars, here’s a response from one of my sources who cannot at present be identified, but works in this space.

    “The Toy Story demo starts with a simple banner. That’s table stakes in mobile and anyone with an SDK can do it.

    The Toy Story demo continues with a click on the banner to a webview landing page. That landing page is “interactive” in that the “carousel” can rotate with a touch. None of this is specific to iAd. The technologies involved are CSS and Javascript and HTML5.

    Here’s a simple illustration

    http://superted.me/toy-story-iad-navigation

    This guy built the ToyStory carousel experience as demoed. The video-view-from-landing-page as Jobs demoed is simple. …

    Jobs demoed a ‘game’ from the landing page as well. The game is doable in HTML5…. this is all webapp stuff. Apple could build something deeper with a native app but that would have to get down to the phone somehow.

    This guy’s recreation of the carousel demonstrates that there’s nothing specific to iAd about what Jobs showed.

    He includes code snippets which is sorta cool. Plus his blog name is “SuperTed” which is funny.

    Anyone could create a landing page like this and drive traffic it from banners on iPhone.”

  18. Chip Wayt says:

    Happy to help from my shop up on Mt. Tam

  19. CW says:

    Here’s a Chase Saphire (Credit Card) ad using HTML5 on the iPad: http://www.youtube.com/medialets

  20. Brian says:

    We (The Visionaire Group) created this mobile site http://www.vimeo.com/3729320 over a year ago for Universal Pictures’ Fast & Furious. It ran directly within AdMob’s in app Interstitial ad and was developed using javascript. There really is nothing new to the iAd in terms of what is possible creatively on mobile devices and how/where the ads run. What’s been holding back mobile creative up until this point is budget. When budgets increase, creative will improve.

  21. Lester Puppo says:

    Contrary to most of the comments, I believe the article is very realistic and the description of the situation is more objective than the way in which some of these people think. Personally, thank you for sharing.

  22. i think in latest marketing trends mobile marketing is the best way to advertise are marketing purpose just like above we can see that IAD is a good way fir mobile web apple mobile introduce a good technology for mobile (Web add) like TV add.

  23. Apple restrictions on CoreLocation to 3rd party advertisers says:

    “Apple announced that it would prevent third-party iPhone developers using its Core Location framework from designing apps that deliver targeted ads to iPhone users”

    http://www.eweekeurope.co.uk/news/news-mobile-wireless/apple-blocks-iphone-ad-gps-development-3283

    And see Section 3.3.9 for the user-data restrictions.

    http://mediamemo.allthingsd.com/20100412/is-apple-closing-off-the-iphone-to-rival-ad-networks/

  24. Michael says:

    No advertising !!!
    I don’t want to see them and I don’t want to pay for it, because I am downloading this crap.
    I want to have a free will and don’t want to be manipulated or annoyed by
    advertising. That’s way am switching to a new channel if I use my TV.

    The question would be about consumer protection laws…

    I have bought this piece of hardware (iphone) for a particular reason.
    And that reason is clearly to have NO advertisement on my phone.
    It would also increase my monthly data usage…

    Regards

    Michael

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