Apple Launches iAd Product for Application Developers

Apple has launched a version of its iAd mobile advertising product designed specifically for application developers, allowing them to advertise their software to users from directly within other applications. The developers’ iAd banners will link directly to the App Store, allowing users to download products without leaving the application they’re using at the time.

To eradicate potential conflicts of interests, developers can exclude ads from competitors or unwanted advertisers from their apps, based on keywords, URLs, or specific Apple application IDs.

Commenting on the announcement, Joe Sipher, co-founder and CMO of ad-supported mobile development firm Pinger described the announcement as “great news on two fronts,” in reference to his company’s roles as both an advertiser and a publisher of applications. “As an iAd publisher, one of our problems is there aren’t enough advertisers to go around. iAd requests are currently filled a relatively low percentage of the time, so we have to fall back to other networks. Opening up the platform should make that happen a lot less frequently,” he said, stating that Apple’s current fill rate for iAds is lower than he would like it to be.

Meanwhile, Sipher also expressed interest in the product as an advertiser, though stipulated it would be subject to the same ROI-focused analysis as other channels. “As a customer acquisition tool we’d love to experiment with this, but ultimately we’re numbers focused. We’ll build ads and test them to see if they’re cost effective, but it will have to be more effective than other ad networks,” he said. So far Apple has not disclosed on what basis developer ads will be charged, but its main iAd product is currently billed on the basis of $10 dollars per thousand impressions, coupled with $2 for every click.

In terms of targeting, Apple has released little information on what options, if any, will be available to developer advertisers. Apple’s site simply says the company “will optimize your campaign to ensure the right audience is viewing and interacting with your ads,” suggesting advertisers might have little influence on that process. As Sipher points out, however, many digital ads are currently sold on that basis, with networks optimizing ad placement and delivery based on click-through rates and other metrics hidden to the advertiser.

For the reasons Sipher highlighted, the announcement is likely to be welcomed by iAd network members for the boost it promises to give their fill-rates, and by most developers as another channel through which to market and sell their products. Mobile ad firms are already praising Apple’s contribution to the space through its presence alone, and the extension of its product-range could help attract more mobile ad spending, or at least divert spend from its competitors such as Google-owned AdMob, and rival ad networks such as Millennial Media.