Apple hasn’t made any secret about its plans to get into the mobile advertising game. It purchased Quattro in January for around $300 million, a firm that was reportedly its second choice after Google snapped up AdMob for $750 million in November of 2009. Apple had apparently made unsuccessful overtures to AdMob earlier in the year.
A new “iAd” service, which is said to be in the pipeline for an April 7 reveal to the Madison Avenue crowd, according to “executives familiar with the plan” speaking to MediaPost, will be built on top of the framework provided by the Quattro purchase. The sources also quote Steve Jobs as saying the service will be “revolutionary” and “our next big thing.”
No other details are forthcoming as of yet, but it does seem clear that Apple intends to take on Google in the mobile advertising space, and it likely intends to do so by waging the war on home turf. Who better to serve ads to Apple’s mobile devices than Apple itself? Tailoring content to the iPad, iPhone and iPod touch should be easy enough, especially given that Apple has access to more of the iPhone OS than do third-party developers and advertisers.
It may seem like an unexpected move from Apple to move into the advertising business, but it actually fits the company’s M.O. quite well. Think about iTunes and music, iTunes and video content, and now the iBookstore and books. In each case, Apple offered a beleaguered industry a way out of a financially disastrous situation. In doing so, it opened up new revenue streams, and made sure the content desires of its hardware user base were met.
Locking down the mobile advertising market doesn’t necessarily cater to users in the same way, but it does fit the other criteria. Advertisers have been struggling following the gradual and continuing weakening of print media and television, and so far, online ads have only met with limited success and have yet to take off in the way its predecessors did. For companies still looking to find that sweet spot in which it is possible to really sell to web-connected audiences, Apple, with its inside knowledge of mobile web user habits and history of commodifying what once was free (i.e. the Internet, via apps) will look like a very fine prospect indeed.
I’m not generally one to dole out business advice, but if Apple does roll out some kind of iAds platform early next month, get in on the ground floor if you’re in the advertising space. Just look at what Cupertino has already done in terms of making advertisers vie for space in magazines launching on the iPad. Now imagine what it can do when advertising is its primary focus, not just a tangential benefit.
Related GigaOM Pro Research (sub req’d):
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