If you’re an advertiser, Apple is about to make your job more difficult. The latest IOS 9 for iPhones and iPads allows mobile ad blocking and introduces a Flipboard-style news aggregator that favours iAds over rivals. We look at the implications as Apple changes the rules of the mobile ad game…
When Apple introduced its mobile ad platform back in 2010, it vowed to capture 50% of the market. Five years on and iAds generates just under 4% of US mobile ad revenue, compared to Android’s 44%.
iAds has struggled for numerous reasons, largely because they do not like sharing data or ‘spying’ on consumers, which is ultimately why online ads are so effective.
Source: eMarketer.com
Winners and losers in an ad-free world
In this context, it’s easy to see why Apple is prepared to block ads from iOS 9. This in turn means that Apple can now force mobile marketers to place ‘white-listed’ ads through its own iAd network and crucially, not on rivals such as Google.
The dominant advertiser on the Internet is Google. Ads are where Google makes 90% of its $59bn-a-year revenue.
Microsoft, Yahoo and other Apple rivals also have online ad networks that will take a hit in reduced ad revenues.
By allowing users to block the majority of ads, Apple are making this a straight fight against Android’s business model whilst also taking the moral high ground of helping consumers to a smoother, ad-free experience.
There is a very big chance that advertisers are going to get caught in the cross fire and a lot of mobile advertising is going to be less effective in the coming months as IOS9 users take advantage of new ad blocking software on their phones.
If Google and display advertising networks are likely to be the losers the winners are most likely to be Facebook and Twitter who can offer immersive ads as part of the apps in iOS rather than be bothered with the ad-blocking that is only going to be through the Safari browser not other apps.
News app: Tightening the Apple ecosystem
A new feature of IOS 9 is the Apple News app (replacing ‘Newsstand’)- the company’s latest attempt at putting the news you care about in a single location, much like the popular Flipboard app.
The app lets users select media outlets to add a personalised feed- but crucuially Apple has imposed strict rules on how adverts will be displayed alongside content from publishers.
Apple News includes a slick new interface that includes the ability to display graphics, videos and more with a quick and intuitive interface.
Apple is aiming to make the app a central source for news of all kinds, but presented in a way friendlier to iPhones and iPads. Publishers will get to keep all of the revenue from ads they sell on their own, but Apple will take 30% of backfill revenue.
While the firm is allowing links to the publishers websites, other controls remain. The News app won’t allow DoubleClick, Google’s advertising service, and pre-roll video adverts will be vetted by Apple before they are allowed to run, much to the dismay of some advertisers (and the New York Post reports).
Just as with Facebook’s ‘Instant Articles’, publishers now have to choose how much control they want to give a third party, in this case Apple, while simultaneously reaching the largest, most engaged and affluent audience. The rules of mobile advertising have well and truly changed.