Media: All about Apple's iAd

This time, not everyone is swallowing the hyperbole.

Steve jobs unveils iAds to Apple developers
Steve jobs unveils iAds to Apple developers

They call it "the Apple Factor". Not to be confused with the Apple factory, you understand. And, of course, by its very nature, the Apple Factor guarantees that such confusion will rarely, if ever, arise.

For instance, there is hardly a squeak in mainstream news media about, say, allegations of shoddy corporate ethics or the spate of suicides at Apple's Foxconn manufacturing supplier. The technology sector and the creative industries tend to cut the Apple boss, Steve Jobs, an astonishing amount of slack. In some eyes, he has become a revered, almost saintly figure.

Because there are those who claim, with some justification, that he has invented (and, indeed, continues to invent) the 21st century. He is the embodiment of the spirit of the age - and you can easily argue that Apple's designs will come to define the previous and present decades in the same way that Art Deco defined the 20s and 30s.

The Apple Factor is a halo surrounding everything the company does, every gizmo it brings to market and every software system it launches. The Apple Factor traces its genesis to the invention of the mouse, onscreen icons and contoured, coloured Plexiglas casings in the 80s and 90s, but came into its own with the iPod, the iPhone and the iPad in more recent years.

The iPhone was particularly important in the evolution of the Jobs mythology - because its success made such a fool out of the technology sector's arch pantomime villain, the Microsoft boss Steve Ballmer, who predicted that the iPhone would be the end of Apple.

Since then, Jobs and Ballmer have been locked in an almost Manichean struggle for the future of the digital world. They were at it again at a US conference last week. Jobs stated that the post-PC era was upon us. Ballmer said it wasn't.

It is within this context that we must view last week's launch of iAd. In the gospel according to Jobs, the mobile app is the alpha and the omega, and now iAd is here to revolutionise mobile app advertising. Last week, we saw the Apple Factor kicking in, as advertisers and agencies fell over themselves to express their support.

Apple's awesome PR machine went into overdrive, with most media outlets reporting its claim to have already secured $60 million worth of iAd commitments for 2010 - in other words, almost half of the mobile adspend forecast in the US for the second half of this year.

Interesting, however, is the disquiet in some quarters at the way Apple insists on mixing hype with zealous secrecy. Others, a small but perhaps growing minority, have expressed disapproval of what they regard as heavy-handed and bullying business methods. Advertisers agreeing to be pioneer users of iAd, for instance, have been compelled to sign punitive non-disclosure contracts. Aside, of course, from being able to reveal that they have signed up to iAd.

1. IAd, which is built into the new iOS 4 operating system, allows users to stay within an app while engaging with an ad. Developers who join the iAd Network can incorporate a variety of advertising formats into their apps. Apple will sell and serve the ads, and developers will receive 60 per cent of the iAd Network revenue.

2. It launches formally in the US in July and the UK in September. It is being sold by Quattro Wireless, the mobile advertising specialist acquired by Apple in January for $275 million.

3. The mobile ad market is gearing up to be a defining digital battleground. In May, for instance, Google paid $750 million for the AdMob mobile advertising company. And all the major digital players, from Yahoo! to Microsoft, have mobile products spanning search and display. Apple, however, is creating a market of its own by focusing on ads in mobile apps.

4. Rivals are now urging regulators in the US to investigate whether iAd is effectively a "walled garden" to which third parties should be allowed access.

5. IAd has a glittering array of launch partners, including AT&T, Campbell Soup Company, Chanel, Nissan, Unilever and the Walt Disney Studios. Its most enthusiastic cheerleader was Rob Master, the media director of Unilever North American, who commented: "IAd will revolutionise mobile advertising. With iAd, we have been able to create some of our most powerful and compelling ads ever. It is the perfect mobile format to reach and engage with our customers."



- Apple can be trusted to deliver an aesthetically pleasing advertising experience to its customers, and that might help to generate mobile market momentum, which could eventually benefit every company in this sector.

- After all, the development of the mobile advertising business has been painfully slow. Internet-enabled phones have been around for five years, but the business has hardly left square one.

- Yet there are worries, not least among developers, that Apple intends not just to corner this market, but to dictate terms in a rather Draconian fashion.


- Some agencies have clearly been fretting about the gung-ho enthusiasm of some of their clients. As one senior executive puts it: "They're keen to be seen to be involved because they hope some of the 'Apple Factor' will rub off on them. It makes them look like the leaders in their field."

- They worry that too many advertisers are over-committing themselves unwisely, and this will make it difficult to set down realistic markers on pricing. There is also a consensus that Apple's proposed "double hit" pricing model is scarily expensive. It is looking to charge both for impression and engagement: one cent per initial impression and an astonishing $2 per click.

- That's why many are keen to believe that iAd's $60 million revenue figure for the rest of 2010 is the product of wishful thinking on Apple's part. "Apple claims iAd will deliver great results," one media buyer says. "I rather think it's up to them to prove that."