Producers of mobile apps can now market them across Apple’s iAd Network

Apple is extending its burgeoning new iAd mobile advertising platform to app developers themselves.Via the new iAd for Developers initiative, companies and individuals that produce mobile apps can now market them across Apple’s iAd Network. Earlier this month, Apple introduced its iAd advertising platform, which helps mobile developers monetize their apps by delivering ads which run within the applications themselves -- without diverting mobile users to the Internet. Participants in that program are able to retain 60 percent of the associated ad revenue while also tracking basic metrics, such as click-through rates. Now, Apple wants to help these same developers promote their own wares via the new network to “millions of users,” according to a company statement. While Apple doesn’t report how many apps or exactly how many users are reached by the iAd network, it reported last month that brands such as AT&T, Best Buy, Campbell Soup, Chanel, Nissan and Target had signed aboard. Overall, the network has received over $60 million in ad commitments for 2010. Like those advertisers, developers will receive access to campaign data such as revenue and click-through rates as part of purchasing inventory on the network. Apple also provides developers with information on how to best incorporate ads within their apps, including tips on design, ad size and consumer experience.

The decision basically bets that advertisers will put up with the continued fragmentation of ad sizes and requirements

The Interactive Advertising Bureau has decided the ad market for mobile applications is too new for standards. The decision basically bets that advertisers will put up with the continued fragmentation of ad sizes and requirements in return for the ability to experiment in a still nascent medium. "Any effort to promote simplification of ad formats must make it easier or cheaper to produce creative for the medium, without stifling creativity of those designing content or advertising for that medium," the IAB wrote in a report released today. "At this stage, the in-app ad landscape is too new and dynamic to be ready for creative standards." The IAB based its decision to take a pass on standardization on a marketplace study that gathered feedback from app platforms and publishers. It found a fractured market that is inching in the direction of consistency.
 
Standard display sizes are emerging. For example, the 300-by-50 pixel display ad is accepted at a majority of the 14 publishers surveyed. There are also many publishers offering wider ads that display better on iPhone screens. Yet, other areas are more unsettled. Expandable formats vary, the IAB noted. File weight limits differ wildly from publisher to publisher, ranging from 5 KB to 15 KB in the IAB survey. Newer opportunities like the iPad increase the variables. The IAB found a mix of standard sizes from the Web with common mobile sizes -- and even a couple publishers offering super-sized ads that take advantage of the Apple tablet's larger screen.
The process becomes even more complex when taking into account various devices, and the IAB found one publisher offering formats targeted to specific BlackBerry models. The IAB traditionally has served as the Internet industry's clearinghouse for standards and guidelines. It's a role that could come into question as digital advertising moves from the desktop into wireless, TV and other areas. The mobile industry, for instance, already has standards set by the Mobile Marketing Association. The MMA said it modeled the guidelines on what the IAB devised for Web display advertising. (The MMA endorsed four graphical sizes and one text unit at the 6:1 and 4:1 aspect ratios.) An IAB rep said the two organizations would work together and "were we to issue official guidelines around formats, we would involve them in every step of the process." For now, the IAB is encouraging basic best practices, including building mobile-specific landing pages for campaigns, keeping creative file sizes low, and building specifically for different devices. The final best practice should ensure the mobile ad market remain fractured for some time to come.

The last six months of jockeying between Google and Apple have put a spotlight on mobile advertising. The news has been such that one could be forgiven for thinking that these two companies have the only platforms needed to reach consumers on mobile devices. Both are certainly making significant investments to be consumers' platforms of choice. They have spent over $1 billion acquiring mobile advertising companies, and released new devices to create new product categories and distribution channels (e.g., Nexus One, iPad). Not surprisingly, such moves have attracted in-depth Federal Trade Commission investigations along the way. While the convergent timing may be coincidental, it is emblematic of a broader struggle over the future of advertising.

But if, as Gartner, Pew and Morgan Stanley predict, more users access the Web through mobile devices than PCs in as soon as three years, then marketers will need solutions beyond these platforms to maximize reach and engagement with their target audiences -- audiences that use, and will continue to use, different technologies and networks. And ultimately, because advertisers care more about reach and engagement than the particular device or OS, they'll need to embrace open solutions that work seamlessly across any mobile device running any operating system.

Both Apple and Google are working to shape the mobile Web in their own image. Apple's mobile platforms enforce a "walled garden" of content and applications, controlled and distributed exclusively by Apple. In such an app-centric environment, Apple seeks to reshape the mobile Web as it sees fit. Adobe, for example, has already abandoned Flash efforts for the iPhone and iPad after recent restrictions imposed by Apple. And Apple's iAd advertising strategy seems focused on rich media delivery for premium brands.

In an opposite strategy, Google's Android platform for phones and tablets -- including its network-agnostic Nexus One -- seeks to break mobile's long history of failed walled gardens with an environment as open as the PC, friendly to all Web and client applications. Adobe Flash, to continue the previous illustration, will be supported by upcoming versions of Android. Google's advertising strategy, given auction marketplaces like Adwords and Admob, seems long-tail focused. But, according to comScore last quarter, Apple represented only 4 percent of the U.S. devices at the end of last year. Android held less than 1 percent. Nielsen reports that U.S. mobile Web reach is now 72 million, a critical mass. Clearly, to communicate with that audience, mobile advertising campaigns need to go beyond Apple to handsets from Motorola, Nokia, Samsung, RIM (BlackBerry) and LG, all of which have a larger installed base than Apple.

The promise of mobile is a more effective digital advertising delivery system given the personal nature of the medium. As it further delivers on its promise -- using consumer intelligence to target people -- the audience starts to narrow, particularly if one is targeting a specific mobile device. Therefore, campaigns need to reach across multiple platforms to aggregate large enough groups of users. Mobile Web publishers, application developers and advertisers want advertising solutions that work across all handsets and operators. Fragmentation -- specifically different standards, technology platforms, and capabilities from handset manufacturers and operators -- has been another large barrier to mobile advertising adoption in markets around the world.

Android alone, for example, suffers from fragmentation with four versions since its first product shipped in October 2008. These different operating systems have different capabilities (e.g., multitouch), requiring application developers to choose whether to adapt or not support. Many long-tail publishers will use Apple's iAd service by default because it is embedded in the application development kit. Google is likely to embed such services with Android, followed similarly by other phone platform companies (e.g., RIM, Microsoft, Palm). Further, many mobile operators have already announced application storefront offerings that include embedded ad network services. With more users moving to mobile devices every day, marketing messages and advertiser spending are sure to follow. Marketers need to embrace open solutions that work across operating systems.

-By Jorey Ramer