With the latest changes to iTunes Connect, Apple has clearly changed its approach to mobile advertising. For the last three years, Apple has targeted large brands with minimum buy-ins ranging in the hundreds of thousands of dollars. However, uptake of iAd does not seem to have been at the level Apple expected, which has had a negative impact on developers, who have commonly observed low fill rates for their ads.
In mid 2010, Apple allowed app developers to participate in the advertising side of iAd program, by showing banner ads that link directly to their apps. With newly announced changes to iAd, which have been discussed in-depth at WWDC, Apple has furthered this push.
There were no shortage of details regarding Apple’s much rumored radio service leading up to today’s keynote address. The rumors said Apple was planning on introducing a free, ad-supported radio service, similar to Pandora, that would be highly integrated with a tweaked model for its iAd business. Apple has now officially unveiled the service dubbed ‘iTunes Radio’ and provided some details on exactly how it will work during its keynote presentation this morning at Moscone West in San Francisco.
The new iTunes Radio app is built in to the iOS radio app, and works on the Mac and Apple TV as well. As rumored, iTunes Radio will be free, supported by ads. In a twist, however, iTunes Radio will be completely free (free of ads) if you’re a subscriber to iTunes Match:
The Music app has a beautiful new design and includes the new iTunes Radio, a free Internet radio service featuring over 200 stations and an incredible catalog of music from the iTunes Store®, combined with features only iTunes can deliver. iTunes Radio is the best way to discover new music. When you tune into iTunes Radio on your iPhone, iPad, iPod touch, Mac®, PC or Apple TV®, you’ll have access to stations inspired by the music you already listen to, Featured Stations curated by Apple and genre-focused stations that are personalized just for you.
As we reported prior to today’s event, the underlining technology is based on Apple’s iTunes Genius feature with iTunes Radio tailoring the experience to your iTunes usage. Apple says there will be Siri integration, and also aims to offer users “access to exclusive “first listen” premieres from top selling artists.” Read more
In case you were wondering whether or not the ads would be audio ads or traditional app-like iAds, AdAge says both:
The audio ads will be sold via iAd, Apple’s mobile ad network, according to a former Apple executive with knowledge of the situation. In addition to audio ads, the streaming music service will also contain the mobile ads iAd currently sells.
The aim of the ad-supported service, which according to the report’s sources will not include the ability to search or play specific songs on-demand, is to drive song downloads to iTunes.
The report adds that a spokesperson for Sony/ATV Music Publishing, the one major publisher that reportedly hasn’t made deal with Apple yet, said the company “is optimistic it will sign a deal with Apple soon.” Read more
While Tim Cook didn’t seem to place too much emphasis on advertising being a core business for Apple when asked about mobile advertising during his recent D11 interview, BusinessInsider reports it has heard from sources that Apple is gearing up to launch an ad exchange service similar to recent efforts by Twitter and Facebook:
We heard it from an executive who is one of the biggest players in online advertising… an ad exchange would work by allowing advertisers to target users as they enter the Apple eco-system on their iPads, MacBooks, various web sites and apps. The system would alert advertisers that an Apple user arrived. Any advertiser tracking that user with a cookie (a piece of software that records previous web sites you’ve looked at) could then bid to serve an ad targeting that user.
When asked why Apple wasn’t making money off its mobile ad business in comparison to other companies such as Facebook, CEO Tim Cook told D11 attendees that the focus for advertising was making developers money, not Apple. Cook said the company would continue doing things in advertising only if it contributed to its developer community, but according to several execs in the advertising industry quoted in the report, Apple could have much bigger plans for its ad business in the months to come. Read more
AllThingsD reported that Apple is planning an event for late January to be held in New York, not in Cupertino or San Francisco, Calif. The event will not be huge nor will it cover any iPad or Apple TV related announcements.
But, for sure, several sources underscored that the event is not related to an upcoming version of the iPad 3, the next iteration of the popular tablet device that many expect to be available in 2012. Also unlikely,?the rollout of Apple’s large-scale rethinking of its interactive television initiative currently in the works. While the company is expected to launch a new Apple TV product later in 2012, such an event would also certainly be held in the heart of the industry in Hollywood or at least in Silicon Valley. That leaves some kind of advertising or even publishing announcement…
Apple’s Senior Vice President of Internet Services and Software Eddy Cue is said to be involved in the event, and the event is reportedly “media-related.” On a side note, Apple has an office for their iAd business in New York, the business that Cue is now in heading.
The Wall Street Journalreported this evening that Apple isn’t seeing the success they’d like with their iAd platform. The company has deployed iAd as an advertising platform throughout their iOS devices in the summer of 2010 and is now making changes in the hope of attracting both more developers and ad spending. First off, Apple is reportedly lowering the entry-level cost for marketers to $400,000 – down from $500,000 and even lower from the original $1 million when the platform was launched. Apple is also reportedly putting new caps on what it charges for clicks on ads, letting advertisers pay $10 each time an advert is viewed every 1,000 times (CPM) and $2 every time it’s specifically tapped on.
So why is Apple making these changes? Apple had tied for the lead in ad market share last year, but has reportedly fallen back to the third place in 2011 advertising market share, behind Millennial Media (#2) Google (#1), per IDC. Hoping to re-gain lost share, Apple is also launching a training program to bring in more advertisers onto the network, partnering with its media buying agency OMD, part of Omnicom Group Inc. to educate new advertisers on iAd, a standard practice providers of digital advertising platforms such as Google and Yahoo! have been exercising from the onset. In the recent weeks, executives from Pepsi, Clorox and JC Penny have reportedly visited Apple’s campus to talk about iAd. OMD also hopes to lure more advertisers in February 2012.