Apple previews iAds for agencies, may restrict 3rd part ad networks

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Advertising agency Hill Holiday blogged about their visit from Apple's iAd team -- you know, the folks who want to make mobile ads not suck -- and shared what they could about the experience:

  • They saw the Toy Story ad from Steve Jobs' iPhone OS 4 keynote live and in person and liked the less jarring, place-keeping nature of the iAd.
  • iAds will be branded so you can tell them apart from more-jarring, browser-jumping ads from other networks, and there'll be only one per app screen, top or bottom.
  • iAds look and behave like apps and have full access to the OS.
  • Apple will build all iAds in house to start, with an iAd SDK coming later
  • Launching in June with "charter" ads, only for iPhone and iPod touch with iPad coming later
  • No details on targeting yet
  • They did hear about price but can't talk about it yet. Think premium though, straightforward and elegant.

Meanwhile MediaMemo thinks Apple is going to again use the double-punch combo of great technology and SDK license restrictions to make it difficult for rivals to compete on the iPhone platform:

[Competitors are] concerned about language in the contract that seems to ban apps from transmitting data that third-party ad networks would use to track their ads’ performance. If they’re right, Apple’s contract would severely handicap rival “in-app” ad networks–like Google’s AdMob–without formally banning them.

“Ads don’t exist without analytics,” says a mobile ad executive. “Can’t measure it, can’t bill for it.”

They can go advertise to Android, BlackBerry, or Palm users any way they like (so far), just not iPhone users any other way than what Apple lets them. Magazines control what ads go on their pages, can Apple expect people to accept their doing the same thing on their devices? (Or at least giving themselves a significant advantage on the iPhone?)

[Hill Holiday and MediaMemo via Macrumors]

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Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, Vector, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Apple previews iAds for agencies, may restrict 3rd part ad networks

13 Comments

Heck it's not right to shut out the compition like this but hey... If it means no more crappy ads on my phone I'm all for it!

@Gwydion, I don't think that this is going to register with the FTC for a while. First, Apple currently has what percent of the market for mobile ads? 0% sounds about right. Then there's the matter of Google's purchase of AdMob, who Apple originally wanted to buy. Well, that purchase is under scrutiny because too many companies see Google as a monopoly in search ads and don't want them to create a similar monopoly in mobile advertising. Finally, Android is growing, may surpass the iPhone and will give the market a choice. If the government moves in on Apple they're going to have to do something about Android too. If/when that day comes then they're going to force each to open up the market to the other. By that point in time they'll be able to differentiate from Google on advertising and will be able to slug it out on equal terms.
On another note, I'm a bit shocked that Apple didn't have an iAd SDK out with the launch. Maybe they want to create an in house competency before opening up the market - just a thought. Also, the Don Draper type that spoke about analytics is spot on. That's what Apple needs to prove that their vision of advertising is more effective than Google's. That's how the premium will become premium.

"Magazines control what ads go on their pages, can Apple expect people to accept their doing the same thing on their devices?"
Not quite an accurate analogy -- magazines enforce editorial standards over the content of ads on their magazine, not effectively mandate any particular distribution channel or delivery firm for ads in the magazine, as Apple is doing.
Would the FTC (or its equivalent in other countries) have something to say? Who knows? The ability to do this in any significant market is virtually unprecedented, so these are largely unchartered legal waters.

@The Reptile
I'm not talking about monopolies, that's stupid regarding iPhone.
I'm talking about fair competition

@Gwydion
Despite the popularity of the iPhone, I don't think it's ubiquitous enough to claim that restricting ads on the iPhone is an FTC violation against fair competition. The competition can still advertise on Palm, Android, RIM, Windows, and other mobile devices to still reach their audiences. If the iPhone became universally more common than any significant combination of those, then you might have a case (see the EU's ruling against Microsoft IE browser), but that's not the case now. Now, it's just a matter of Apple controlling what you (and developers and advertisers) can do on their hardware and OS. That may be controlling, but I don't think it's anti-competitive in the FTC sense.

@Gwydion
To clarify my point, I don't think the FTC sees iPhone users as a group separate from the smartphone users at large who would need unique anti-competitive protection. Apple is not doing anything to limit the competition within the overall smartphone space, only within their limited slice of the pie.

Well since the ads available now will still be availabe when iad is here, I don't think any of this is a big deal. Why wouldn't apple make the ads they are making in house work better and have more control over them.

@Copy of Dev:
THANK YOU for pointing out the fallacy of the analogy.
Apple is denying others ANY way to make money from alternative advertising engines other than browser launches. They are denying any ability to sell targeted ads, so that a person using a free game-app might be shown random ads rather than ads for games.
Analytics are key.

Ok why are you all complaining about this? If you make ads or have them in your app, all you have to do is take a little more time out of your day to use iads. If your a regular end user like me, then all this means is that you have no more crappy ads! It's a win win for everyone except google haha

12 I can't understand this hatred and blind sighting.
Yes, you can use iAds, but because Apple denies competition.
I think someone here would justify a restriction like using only songs purchased on iTunes.