Tracking iAd's progress
$60 million. That’s the number that sticks in our heads – the amount Apple said back in June that charter advertisers had committed to its new iAd advertising network in 2010.
So how is iAd doing? By most accounts, the ramp-up has been slow. Publicized iAd campaigns can still be counted on two hands, and Apple hasn’t had much to say about the program since its launch. But the early returns on the iAd campaigns we know about have been positive.
Here are brands that have announced iAd campaigns, which call for a minimum $1 million commitment from the advertiser:
- Sonos launched an ad for its high-end Internet speaker systems. A Sonos rep told Business Insider that the iAd campaign represents a "major percent of marketing spend for us." (see ad below)
- JCPenney plans to debut an interactive ad for the holiday shopping season.
- BMW released what it called the “first-ever user-generated iAd,” which allows users to build a custom BMW X3 model.
- Sears plans to launch an iAd later this month to promote its new online shopping service.
- Auto insurer GEICO launched an iAd in October that promotes its brand through games, downloadable ringtones and wallpaper and videos that users can view from the ad.
- Nissan was one of the first to release an iAd campaign, promoting its new Leaf electric car.
- Unilever released an iAd for its Dove brand and another for its Family Dish campaign.
Too much creative control?
Not every big brand that committed to iAd has followed through with a campaign. Adidas pulled out of the iAd program, a move Business Insider attributed to Apple exerting too much control over the creative. An industry executive told Business Insider that Adidas canceled its iAds “after Apple rejected its creative concept for the third time.”
The Wall Street Journal had previously reported that luxury marketer Chanel, one of iAd’s launch partners, also has decided not to launch a campaign. The WSJ reported that the iAd development process takes “about eight to 10 weeks from brainstorm to completion—longer than normal for most mobile ads.”
"It's a huge issue having Apple in the creative mix," Patrick Moorhead, director of mobile platforms at ad agency DraftFCB, told the WSJ.
Frustration over metrics
Apple’s lack of transparency over campaign metrics has also frustrated advertisers and app developers.
“It’s really frustrating in terms of the lack of data [Apple] is willing to give to publishers, and the challenges publishers are having,” Starcom MediaVest’s Robin Steinberg said at the Digiday:Apps conference. “Publishers want to share data – that’s not saying that none of them want to control it – but Steve Jobs is controlling it 100 percent, which is creating pushback, and preventing publishers from getting apps out on a timely basis.”
The campaign metrics that advertisers and publishers have shared have been positive, however.
Dictionary.com president Shravan Goli told Business Insider in August that effective CPM rates for advertising in the company’s iPhone app rose 177% in the first month after the publisher activated iAds. Goli also noted that iAd CPMs were two to three times the rates he's seen from other mobile ad networks.
CBS told the LA Times that its six iPhone apps were generating CPMs as high as $25. For Unilever’s Dove ad, 20% of viewers returned to look at the ad a second time – a key metric for marketers. And Nissan said that customers spent an average of 90 seconds with the iAd for its Leaf electric car, which is 10 times longer than interaction times for comparable online ads. Consumers also "tapped" on the Leaf iAd five times more frequently than they clicked on regular online display ads for the Leaf, Nissan told the LA Times.
Nissan also told WSJ.com that the iAd campaign for the Leaf "has driven exceptional results to date," without providing specifics.
One publisher told WSJ.com’s Digits that he was seeing CPMs between $10-15. Another said the higher CPMs were tempered by the low inventory of iAds. iAd CPMs deliver “a high number when you get it, but you don’t get it very often,” MobilityWare’s Dave Yonamine told Digits. “The total revenue level is pretty minuscule compared to our other [ad] networks. We can’t rely on it yet.”
In the meantime, Apple continues to enhance its network – while new competitors plot their strategy.
GigaOM reported that Apple plans to add features to iAd that enable in-stream video advertising. GigaOM noted that publishers have been slow to bring their videos to the iPhone and iPad, because of “the lack of mature tools available for monetizing content on those devices” and also because of the lack of Flash support requires publishers to re-work their Flash-based videos.
And speaking of Flash, Adobe announced at its developers’ conference last month that it is working on a new format for mobile ads that can tap into Flash or HTML5. Cnet noted that Adobe is offering ad agencies and publishers an alternative to Apple's iAd, with the goal of building a standard that can run on multiple mobile devices.
Here’s the Sonos ad: