updated 02:09 am EDT, Tue June 4, 2013
Will focus less on ads in apps, apart from 'developer ads'
A claim from Bloomberg says that Apple is revamping its iAd division to support what will be its free but ad-supported streaming music service (dubbed "iRadio" by pundits), expected to be announced at next week's Worldwide Developers Conference and modelled on the popular user-guided, algorithm-picked music station Pandora. The service, which likely won't debut until later this year with the release of iOS 7, will introduce new business models intended to lure name brands to advertise on the radio-esque music service.
Although iAd has -- after numerous false starts -- emerged as the third most-popular mobile advertising network, it is a far cry from industry leader Google in terms of success. Known for its classier, more distinctive ad campaigns and exceptionally high user response, the service is nonetheless seen as a premium niche compared to typical mobile ads, and has seen some of its biggest success with its own "developer ads." The "iAd for Developers" spots are prompted by opening an application, with the ad checking to see if similar programs (or others from the same company) are installed and, if not, suggesting them to the user.
Unnamed sources familiar with the changes to iAd, quoted in the Bloomberg report, say that iAd's focus on mobile advertising in apps will be somewhat de-emphasized in favor of more attention paid to the music service after it launches, echoing the nature of the service itself by promoting songs or other works related to music the user has in their library, what they are listening to now or other brands and products related to the expressed musical taste of the user. Ads would, where appropriate, link directly back to iTunes -- meaning sales resulting from the ad would give some additional revenue to the content owners, alongside Apple.
The change, if true, is a shift -- albeit a modest one -- away from the original iAd model as envisaged by former CEO Steve Jobs. As Tim Cook has explained to investment analysts, iAd is not intended to be a moneymaker for Apple as much as a vessel for developers to make additional revenue by allowing or creating ads -- either from third parties or to promote their own other products. Under the changes, ads on "iRadio" would more directly benefit the advertisers and Apple, since the service isn't controlled by third-parties the way apps are.
Along with the shift in platform emphasis, reports say that iAd executives have been making pricing adjustments for some advertisers, and allowing alcohol brands to advertise using the service, the latter specifically barred by Jobs in iAd's early days as being not suitable for family-friendly advertising. Apple's ability to target ads using the wealth of information it has on users from their iTunes purchases may give Google (which users much broader techniques like cookie and website tracking) a run for its money in terms of being able to present users with ads they may actually be interested in.
Apple's iAd team have allegedly enlisted advertising companies such as Omnicom Group to help it secure name-brand advertisers to put an immediate stamp of familiarity and endorsement on the service, cutting deals to make the launch more attractive to advertisers before it is known how successful the service may be. The "iRadio" feature, which may or may not be incorporated directly into iTunes, is described as a personalized music service -- playing songs likely to be enjoyed by the user based on what is already in their existing libraries, and helping them discover new music that they can then purchase instantly if desired.