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The good and bad of iAd

Next month, I'll be speaking at iMedia's Breakthrough Summit about the impact of Apple's iAd platform on mobile advertising. The somewhat tongue-in-cheek title of my session is "The $1 million CPM: Will Apple's iAd Change the Mobile Market Forever?" To help answer that question -- one that is very much top-of-mind for many marketers -- I've been conducting a series of interviews with top industry executives to get their perspective and assess precisely what the impact of iAd has been. The picture that's been emerging from my conversations as well as other voices around the industry is that the impact of iAd has been both direct and indirect.

Stay informed. For more insights into the latest in mobile marketing technologies and tactics, attend the iMedia Breakthrough Summit, Oct. 17-20. Request your invitation today.

Let's look at the indirect impact first. There is widespread agreement that iAd has:

  • Benefited the mobile advertising space as a whole by generating awareness and excitement about mobile advertising, particularly interactive rich media

  • Reinforced the effectiveness of mobile as a branding medium

In terms of boosting recognition of mobile as a viable advertising channel, Maria Mandel, vice president of marketing and media innovation for AT&T Advanced Ad Solutions and North America board chair of the Mobile Marketing Association, told me, "What Apple did was build a tremendous amount of awareness around in-app rich media advertising. They've really helped build out that market where now there are a lot of advertisers that are aware of in-app rich media advertising and are interested in doing it. And I think that's a good thing for everybody in this space."

Eric Litman, CEO of rich media advertising platform Medialets, offered a similar outlook, describing what he's seen as "a significant uptake in both the level of activity and the velocity of transactions happening on the premium ad side," and citing the launch of iAd as a key factor in this development. "Apple has gotten a whole bunch of brands excited about mobile, particularly interested in doing rich interactions in mobile," he said. "So from that perspective, they've been enormously beneficial to the market."

Generating excitement is an important step for a channel that has enormous reach potential but still lags in marketer investment. The attention Apple has brought to custom creative with the elaborate iAds currently in market creates a beacon for brand dollars. Frank Barbieri, founder and chief product officer of mobile video ad network Transpera, noted, "With iAd in the market, it got everybody talking about the power of mobile as a branding mechanism, and that's a rising tide that we've seen float all boats, including our own." The branding power of iAd is visible in other ways as well. As Chad Stoller, EVP of digital strategy at BBDO, put it, "There is definitely a reason why you have that little apple that appears in the lower right-hand corner of the [iAd] ad unit. It's almost like a seal of approval from Apple."

Of course, it hasn't all been smooth sailing for iAd. The challenges Apple faces are by now well known. There is an increasingly loud chorus of voices sounding the theme that iAd lacks reach, which is a necessary limitation that comes with a siloed network and exclusive inventory.

Cost is also an issue. Although the "million-dollar CPM" is something of a red herring, the investment required to participate in iAd is beyond the reach of many brands, especially those for which mobile is not yet a major component of their media plans. Yes, the first wave of iAd advertisers are benefiting primarily from what Stoller referred to as an "innovation return" -- the effect of associating your brand with something perceived as leading edge. But the halo of innovation cannot and will not last indefinitely. "When blogs stop reviewing iAds, that's when you can stop the innovation clock," he cautioned with a touch a humor.

Couple cost with questionable efficiency and long campaign development times -- resulting from complex custom creative and Apple's trademark tight control over every step of the process -- and you reach the easy conclusion that iAd is not for everyone. "You're talking about a lot of investment and a long cycle time for a smaller reach, and it's a hard calculation to do," Frank Barbieri told me.

As Apple helps to build awareness for mobile in general and raise the bar specifically in terms of rich media creative, marketers will start to demand similar experiences, but with greater reach across different mobile platforms and publishers. And that is where other ad networks, platforms, and rich media firms stand to benefit directly. In some cases, this dynamic has already started to take effect.

The bottom line: Whether or not Apple ends up being good at mobile advertising, iAd is good for mobile advertising.

Noah Elkin is a senior analyst at eMarketer, where he covers trends in mobile marketing, content, and commerce.

On Twitter? Follow Elkin at @noahelkin. Follow iMedia Connection at @iMediaTweet.

Noah Elkin, Ph.D., is a 15+-year digital industry veteran whose career has revolved around the intersection of technology, marketing and content. He formerly served as Chief Product Officer at Industry Index, the ratings and reviews platform...

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