Apple announced last week that they will begin to slow down their Quattro mobile ad network for an eventual shutdown on September 30th. In doing so, they will also shift their entire focus onto their iAd platform, where they will make money. Hopefully, a lot of money.
Should be a win-win for Apple and iOS users alike, no? As a marketing professional and an Apple lover, I understand where Apple’s coming from. They want to clear away ‘clutter’ from the mobile web and make the overall user experience friendlier. While the sentiment is noble, I think they’re shooting themselves in the foot.
The problem with the current iteration of iAd is that they are aimed only at two sets of advertisers: iOS app developers [iAds for Developers], and Fortune 500 companies [regular iAds].
For app developers, the problem is double-edged. In-app ads can go a long way to offset development costs. Still, would app developers allow competitors to advertise within their applications and potentially steal market share? Even for highly popular app developers, it’s a tough pill to swallow. It would be far simpler, and far safer, to make paid apps instead.
While Fortune 500 companies would have little problem being “innovative” with iAds, small and medium sized companies would have to think twice before making such a substantial commitment. Not only is the barrier to entry for iAds exorbitant at $1 million, but it also ignores the external costs to design and develop the ad itself, which can be tens of thousands of dollars. Furthermore, with the economy continuing to swing on a monthly basis, marketers need to justify their return on such an investment. The iAd platform can not do that easily right now. Companies that rely on online sales would simply ask “Why Bother?”
At the end of the day, it just seems like a risky move for Apple to kill their Quattro platform. I can’t imagine Quattro dragging down Apple profits at all, so why stop something that isn’t doing any harm? Do they really see iAds being that much more profitable that it will offset loss revenue from Quattro, and then some?
What do you think?
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Posted under: iPad News