Last week’s news that Apple was opening up its mobile ad network, iAd, to programmatic buying through partnerships with leading ad tech firms was a huge step for the little ad platform that could — and should be a much bigger player in mobile advertising that it currently is.
Accordant Media, Adelphic, AdRoll, GET IT Mobile, MediaMath, Ruicon, Tapsense, and The Trade Desk joined as launch partners. Via Apple APIs, the firms will be able to automate ad buys as well as reporting across more than 250,000 iOS apps.
IAd has failed to capture significant market share since it launched in 2012 with a strategy aimed at attracting big brands with big budgets. EMarketer estimates iAd will account for just 3.3 percent of the U.S. mobile ad market this year — dwarfed by Google which controls nearly half and Facebook which is expected to hold onto just over 15 percent of the market. The move to programmatic signals a major pivot for Apple, and one that could finally allow it to seriously compete with Facebook for mobile ad dollars.
I caught up with AdRoll’s head of mobile growth, Ben Witte, to talk about the news, what it means for mobile advertising, and if this is a tipping point for iAd.
Access And Targeting At Scale
Programmatic offers is scale and access to data for better ad targeting. Facebook, Twitter and Google all offer programmatic and all offer unique data sets to advertisers. All have also enabled retargeting, which is AdRoll’s focus.
Apple, of course, is sitting on a trove of user data it can glean from iTunes and the App Store. “What makes Apple distinctive,” Witte says, “is that they know what types of apps and in-app content users engage with most.”
Being able to harness that data and combine it with data that Apple’s ad tech partners have can be a powerful combination for advertisers, and app marketers in particular.
The Apple Pay Factor
The other play Apple has is the newly unveiled Apple Pay. In the long term, Witte sees Apple Pay playing a role in attribution and closing the loop for marketers on the iAd platform. He’s also looking forward to seeing what types of attribution and analytics retailers that use Apple Pay will get access to as the payment program evolves.
Witte also notes that the launch of Apple Pay as brought wider consumer and retail awareness about mobile payment capabilities generally, and Google is capitalizing on this surge in awareness to drive growth for Google Wallet. Mobile commerce could be at an inflection point, says Witte, adding that these developments are going be positive for mobile ad tech generally.
A Welcome Pivot Toward Openness
Noting that Apple’s initial budget requirements for iAd advertisers were too big, Witte says Apple probably recognized it was a strategic mistake. “The focus should have been on developers — the people who were going to build out this ecosystem — and their interest in monetizing their apps, acquiring and engaging users. Those tactic require direct response and programmatic buying capabilities to drive app installs at scale.”
In April, Apple opened up the platform to anyone with an Apple ID. Adding programmatic brings iAd in line with Google, Facebook and Twitter. The move to partner with third-party ad tech firms rather than facilitate programmatic through its own channels reflects a new approach for Apple as well.
“This move unlocks the user data sets that Apple has, which are on par with Facebook,” says Witte. Third-parties can bring in their own data (AdRoll has purchasing data for example). “Advertisers can mesh that third-party data with Apple’s consumer data sets to get really granular targeting.”
A Boon For Mobile Ad Tech
With a programmatic strategy, iAd is poised to rival Facebook. As CPMs on Facebook have increased 2-3X due to high demand, iAd will be a huge boon for ad tech companies that partner with Apple, predicts Witte . “The launch of programmatic on iAd signifies the potential for another huge market for app developers to acquire and engage customers.”
If marketers add iAd to the mix, it remains to be seen whether those budgets will be pulled from Facebook, AdMob (Google), MoPub (Twitter) or other networks, or if the mobile pie will grow as a whole.
Still, even if Apple can bring the scale and targeting that advertisers are clamoring for, it’s not clear that its ad units can compete with the Facebook’s (and Twitter’s and others’) native ad units. Only banners on iAd can be bought programmatically for now. The interstitial, full-screen units Apple introduced in August aren’t part of this mix yet, though it’s likely they’ll be included in the near future.
Native has been a big pull in bringing advertisers into mobile, and while an interstitial ad that comes up between game levels might be effective for driving installs and upsells, brands and merchants might not find they stack up to Facebook’s offerings, even with the data targeting and scale Apple is adding. It would seem Apple’s format strategy will need to evolve beyond its current offerings. An answer to instream ads may already be in the works.
iAd’s Tipping Point?
Witte says, “This is a big reset, the first inning, if you think about all the assets they have — scale, data, apple pay — they have the potential to build a mobile ad platform that rivals the others.”
“Apple is making a huge reinvestment in mobile advertising. Given the scale and unique data they have, this is only the beginning. We think we are going to see a lot more capabilities coming in the near future.”
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