Apple 2.0

Covering the business that Steve Jobs built

Apple's iAd: The good and the bad

August 16, 2010: 6:40 AM ET

Two views of Cupertino's aggressive foray into the world of smartphone advertising

Source: Nissan

It's been four months since Steve Jobs unveiled iAd, Apple's (AAPL) bold bid to create a market for mobile ads that don't, in his words, "suck."

How's it going? That depends which report your read.

The truth, we suspect, is somewhere between happy and bumpy. The L.A. Times quotes executives at Nissan and Unilever -- the first two of Apple's 17 launch partners to get their campaigns up and running -- who say they are pleased with the click-through rates. Nissan says customers spent an average of 90 seconds -- ten times longer than usual -- with the very first iAd, for Nissan's electric LEAF car, and tapped on it five times more frequently than they did on the online version.

The Journal article points out that Nissan and Unilever were the only launch partners to have ads running for most of July, and that at least one of the partners -- Chanel SA -- has already dropped out of the program. The Journal's sources say that Apple's insistence that its engineers produce the ads, not the agencies' creative teams, is driving Madison Avenue nuts. According to the Journal:

"That has made the creation of the mobile ads laborious, taking about eight to 10 weeks from brainstorm to completion—longer than normal for most mobile ads, executives said. The building of the actual ad, handled by Apple, in some cases is taking two weeks longer than expected, one person added.

"It's a huge issue having Apple in the creative mix," said Patrick Moorhead, director of mobile platforms at DraftFCB, an ad agency owned by Interpublic Group of Cos.

Apple said in early June that it had iAd commitments for 2010 totaling more than $60 million. According to the Journal, more than 10,000 developers signed up for a less elaborate static ad program launched in July. Developers get 60% of every iAd dollar generated by their apps, and Apple keeps the rest.

See also:

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Join the Conversation
About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

Email | @philiped | RSS
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.