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Apple Shuts Down Quattro Ad Network – It’s a Really Bad Idea

by on August 24th, 2010

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

  • http://twitter.com/urbz Antonino Urbano

    I can't say that I really care about any of these ad platforms, to tell the truth. As a user, I simply avoid ads. I don't click on adMob ads (is that Google?), nor on Quattro ads, nor iAds. I like helping out developers that need the revenue, so I simply buy the apps that I like, opting for premium versions if the app is up to snuff.
    Regarding my opinion on shutting down this particular ad network, I think its probably a good idea for Apple. They want the high-profile stuff that will attract eyeballs and taps. It's also probably good for developers, as long as iAds are successful. As you said, it sucks for SMEs but I don't know how many of those actually want to advertise on the iPhone for one reason: many SMEs are regional and serve a more local clientele, in my experience. It may not be of great use to them. Bope. I think it does good to more people than it does bad, so now lets just wait and see if it was the right thing decision!

  • http://twitter.com/scwleung Sam Leung

    Solid commentary on your part, Antonino. It's an interesting take on SMEs. Based on some numbers from the advertising industry, location-based/mobile advertising is actually more suited to SMEs simply because they serve a more local clientele. Granted, there are other ways to reach local audiences (like Yelp or UrbanSpoon), but localized mobile search should definitely be part of the marketing mix.