According to Apple's late chief executive, late Steve Jobs, in-house advertising on the iOS platform with iAd was 'not a get-rich-quick scheme for Apple,' but to provide an incentive to app developers reduce the cost of iPhone apps enough for user attraction. This meant that developers would retain sixty percent revenue from the advertisements while Apple would retain the rest.
The concept deserved success for its originality and brilliance. It was not the typical form of advertising, rather, as one review opined, it was 'an app within an app.' It was meant as an interactive and entertaining feature that would appear within the app and with minimal distraction for the user. It has been two years since, yet iAd has not gained favorable points with advertisers or developers. In fact, the announcement received harsh criticism. The New York Times quoted a senior representative of an advertisement agency stating iAds were not enough for companies to invest on a single platform. Also, iAds were supposedly in the interest of amateur developers who would use them as 'testing tools' to measure their apps' success.
Incidentally, it was the developer community who expressed disappointment. Referring to their iAd experience, they stated that they did not receive sufficient ROI for their apps, especially when there were just a few downloads. This was because monetary gains on the iOS platform were based on CPC (Cost per Click) and not CPI (Cost per impression). On the other hand, as developers sought to defend the quality of their apps, this led to an interesting development regarding how advertisements perceived revenue generation. Although developers claimed that iAd is an expensive option compared with others, they also admitted that the iAd quality was far superior compared to its competitors. By this, one can presume that quality does come with a price, and even though Apple had the upper hand, the iAd failing lay in that majority were willing to spend less and compromise on advertisement experience over choosing iAds.
The following year, when large corporate firms switched to other competitor platforms for advertising, Apple dropped the required minimum rate of advertising contract twice. This year, they lowered it down to USD 100,000. In addition, Apple decided to revise their iAd policy last month, by decreasing advertisement rate and increasing commission for developers by ten percent. However, they remain firm on their policy of disallowing location-based advertisements to third party developers. The latter stance has led to several analysts presuming that Apple plans to use the data for their own exclusive purpose, unlike their competitors who are sharing the data that has aided target advertisement. Whatever the reason may be, Apple can afford the risk as leaders in the market.
Doubt remains on the future success of iAd because of their 'exclusive' take and not allowing advertisements on other platforms. If Apple continues to hold their ground, then it will not be long before companies put in their major share of investment for advertisement into the iOS platform.
Socialjitney is an iPhone Application Development Company providing App Development services including iPhone Application and Application Development.
