In April, Apple (s aapl) saw the money to be had in targeted advertising, and announced it would take an ownership role for ads running on its mobile platform by creating iAd. The idea was actually not too bad: Through this model, Apple would pay 60 percent of revenue to the developer, so even with a free app, both Apple and the developer could stand to make some money. However, in the six weeks since launch, marketers seem to be finding the process of working with Apple difficult, and at least one launch advertiser — Chanel — has ceased working with iAd.
Apple has always been about control. The company controls its hardware and software in such an extreme fashion that its products are often superbly optimized and run like tops. Though, as we’ve seen with the App Store, this high degree of control can also draw criticism, and has caused frustration in the developer community. Now, advertisers are feeling those same pains as developers — but perhaps since they have less to lose, they’ll be more willing to stand up to Apple.
While iAd aims to make in-app marketing easy for developers to utilize, advertisers are feeling the pain of having to interact with Apple’s stringent rules, approval process, and closely-held explanations of how it all should work. A big concern has been the additional time that Apple’s approval processes have added to the design life-cycle (sound familiar?), which can be a killer in the marketing business. These issues have resulted in hardships for early adopters, such as a lack of marketing content or a delayed roll-out while they figure out the best way to approach the use of iAds. While many marketers would certainly love to be on iOS, mobile is not their top priority; mobile display advertising is only supposed to be worth $253 million in 2010, compared to an estimated total $170 billion in total U.S. advertising revenue this year.
According to the Wall Street Journal, Apple has inserted itself directly into the creative process, mandating that they approve designs prior to them ending up in the iAd rotation. That Apple wants a hand in the end look and feel of ads that will run on their devices is really no surprise; they have a standard of how things should look and function in their world, and they aren’t about to let Joe Marketer undo that. The root of the problem though, seems to be that Apple hasn’t released a developer kit of documentation and guidelines for using the iAd platform. Built on HTML5, iAds are intended to run in-app so the user doesn’t have to leave their place if they find interest in a particular advertisement. However, the interaction design is reportedly being closely held by Apple.
Perhaps the iAd concept wasn’t fully baked and should have been cultivated and researched a bit more by Apple before being released. Or maybe it’s such a new business model that Apple is still adapting to the best way of handling it. Whatever the case, it can only help Apple’s case to release some of these guidelines and processes to those who need them most: the people paying money to have their content seen across the iOS platform.
Related GigaOM Pro Research: How iAd and the iPad Will Change Mobile Marketing