Apple’s iAds Growing the Mobile Advertising Market

| Analysis

Apple’s new iAd mobile advertising network is already growing the mobile advertising market, according to at least one advertising exec. Commenting on a story about Apple and Google’s competing services, one exec told The Wall Street Journal that Apple had “awakened the brand community.”

More specifically, Eric Litman, CEO of mobile-advertising company Medialets, said “Apple’s introduction of iAds has woken the brand community up to mobile, and their efforts are benefiting everyone selling in the space.”

This continues a trend for the company, a trend that has been especially apparent since the company released the first iPod, or maybe since the company dropped all legacy ports in favor of USB on the first iMac. When the company first invests in a new technology or market, that technology or market grows, even if it had languished before Apple deigned to notice it.

USB was introduced by Intel in 1995, and though a few PC makers added it to their computers before Apple, it was largely ignored by both the peripheral market and consumers alike. When Apple released the first iMac with USB as the only connection option, there were suddenly a wealth of USB printers, cameras, hard drives, scanners, and other peripheral devices released, and that was followed by a new wave of USB-equipped Windows PCs.

Apple was also not the first to market a digital media device, but the market for such devices was fairly small when Apple released the iPod. As sales of the device began to climb, everybody and their brother began to introduce their own would-be iPod killer. More importantly, consumers began buying these devices (mostly iPods, to be sure), and the market turned into a multibillion market in no time.

Apple’s iPhone was also late to market when it comes to smartphones. Microsoft was among the first to market with a smartphone OS, and Nokia had a thriving business in smartphones outside the U.S. In the U.S., Research In Motion’s BlackBerry had earned the name “CrackBerry” due to its popularity in the Enterprise space, and there were a few Linux-based devices around, too.

Despite all those players and devices, however, the smartphone market was a very small percentage of the overall cell phone business until Apple released the iPhone. Apple’s entry to the market drew consumer attention to smartphones, and now the smartphone category is the fastest growing sector of the otherwise maturing cell phone industry.

Don’t forget the tablet space, either. This is another market where Microsoft introduced a dedicated version of Windows that included specialized software for viewing e-publications and other tablet-oriented features. Several PC makers introduced tablets based on the OS, and others introduced Linux-based tablets.

There were also many dedicated e-readers on the market before the iPad, with the best known being Amazon’s Kindle platform.

Since the iPad was introduced, there have been an explosion of announced tablet products (just today, HP confirmed it would be releasing Web OS-based tablets), many of which will be based on Google’s Android OS. The iPad is selling like hotcakes, and the overall tablet market is poised to take on the same new growth and life that the other above-mentioned markets have seen after Apple entered.

Which brings us back to iAd and the mobile advertising space: Apple wasn’t first to this market, and the mobile ad space was larger and healthier than most of the other markets I’ve highlighted. For instance, Apple developed iAd after it acquired Quattro Wireless. Apple went after Quattro Wireless only after the company lost out to Google in an effort to buy AdMob.

AdMob’s sales alone were close to US$100 million in 2009 when Google won its bid to buy the company, and have no doubt risen dramatically since with Google’s help. The Wall Street Journal noted that research firm eMarketer is estimating overall mobile advertising to rise to $593 million this year.

But Apple has changed the rules for mobile advertising. The company offered a new way of presenting ads, but more importantly Apple has told advertisers they need to pay for mobile branding. Apple is charging $2 when the user taps an iAd, a hefty premium over competing networks, and the company demanded a $1 million minimum commitment to even start with the network.

The overall effect, according to the advertising exec that sparked this article, is that Apple’s shiny new service has served to bring attention to this market, and to “awaken” the corporate powers-that-be to the branding opportunities inherent in mobile advertising.

In short, once again we see that where Apple treads, even if it’s where others have gone before, the rest of the world then stampedes.

Sign Up for the Newsletter

Join the TMO Express Daily Newsletter to get the latest Mac headlines in your e-mail every weekday.

Comments

Garion

Interesting analysis. Nice read.

Would it be wrong to say that Apple with iAds is aiming squarely at big brand corporations as advertisers, where Google/AdMob is going for volume?

Log-in to comment