Apple to ad networks: “This is our world, you’re just living in it.”

Posted by on Jul 1, 2010 in Marketplace, Mobile, Strategy

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Apple’s IAds advertising network launches today, a result of the company’s purchase of mobile ad company Quattro Wireless in January.  Advertising-dependent publishers, look out. Now Steve Job’s firm is thumbing its nose at other ad networks – the most prominent being Google’s AdMob – and taking a door-barring stance that GoMo News is betting will have the U.S. Federal Trade Commission (FTC) in a huff. In fact, the federal investigation has already begun.

Before FTC halts IAds inroads at least several months down the road, however, GoMo anticipates that Apple will be “raking in the money it has blocked others from making.”

In the initial press release Apple announced $60 million in 2010 advertising commitments already in place, from AT&T, Best Buy, Campbell Soup Company, Chanel, Citi, DirecTV, GEICO, GE, JCPenney, Liberty Mutual Group, Nissan, Sears, State Farm, Target, Turner Broadcasting System, Unilever and The Walt Disney Studios. The $60 mil figure represents nearly half of the J.P. Morgan-forecasted US mobile ad spending for the second half of this year.

The differentiator for IAds is that users will stay within the app when viewing the ad – they won’t be redirected to a browser window.  The ad will take up the entire screen, enabled by HTML5.  One problem noted by many, however, is that it will not support flash.

At the initial announcement of IAds Steve Jobs walked a live audience through a Toy Story 3 mobile advertisement that showed not only information about the new movie, but also allowed the user to watch movie trailers and play related games. It even enables product purchases.

Developers split revenue with Apple, keeping 60 percent for themselves.  Advertisers pay at least $1 million, The Wall Street Journal reported. Per-view prices, according to WSJ, are one penny each, with a $2 fee for each user that actually interacts with the ad from her or his mobile device.  No SMEs need apply, clearly.

GoMo said that the IAd isn’t just about making money for Apple: “It’s about Apple reminding everyone who the big dog in the room is.  As iAds launches today, Steve Jobs is looking the rest of the mobile advertising community in the face and saying ‘this is our world, you’re just living in it’. “

Written by Sharon Hill

Sharon Hill has been a senior writer / analyst with the AIM Group since 2004, except for a two-year time-out to serve as sales and marketing manager for Suburban Newspapers of America. She worked at newspapers in California, the Carolinas and Indiana as a classified advertising sales supervisor and manager, and in newspaper circulation in Alaska. At the SNA, she was responsible for bringing in new members; lining up exhibitors, and helping develop programs for the classified conference and the classified alliance. She is also co-author of “Implementing and Managing Telework: A Guide for those who make it Happen” (Praeger Press) and a prolific blogger and social media user. She is based in Phoenix.