It’s no secret that Google, Apple and even RIM want a piece of the $1 billion-and-growing mobile advertising market. The fight over share of ad dollars is even resulting in possible anti-competitive practices. Apple’s developer licensing agreement update in June basically says it reserves the right to block Google’s AdMob from serving ads on the iPhone and iPad, allowing only “independent” ad-serving companies to serve ads on the devices. But in July, AdMob founder Omar Hamoui said that Apple had not yet enforced the policy, allowing Google to continue to serve ads on Apple devices. Perhaps the FTC’s recent interest in Apple’s ad policies delayed the blockade, but multiple industry sources take it as a foregone conclusion that it’s only a matter of time before Apple prevents Google completely from serving ads. If and when that does eventually happen, the mobile ad space could change irrevocably.
Clearly, there is a very real danger that Apple will create a domino effect across the mobile advertising industry if it turns off the switch for AdMob. Let’s just think this through. If Apple were to block Google’s ad network from serving ads on iPhone and iPads, which make up the lions share of OS ad requests according to Millennial’s latest data (55 percent), Google would be forced to focus on the Android market. Android devices are no doubt growing fast, and even overtaking RIM’s share of ad requests according to some reports. Advertisers are no doubt going to want to spend money on targeting Android users. And Google, who develops and distributes the Android platform, would need to make up for the loss of the Apple ecosystem from AdMob’s mobile ad network by generating more revenue through Android.
Of course, Google would be stupid to explicitly close their ecosystem like Apple, but if the company wants to financially capitalize on the growth of the Android platform, it might make sense to favor its own ad network above others.
It’s not just Apple and Android that want their own ad networks. RIM is also reportedly looking to buy an ad network, hoping to take a part in the wireless advertising industry. The BlackBerry manufacturer was reportedly sniffing around Millennial Media, a company that has also stated its intention to IPO in the next year.
So in the coming year, we could see the top three smartphone device makers all have their own mobile ad networks. And RIM’s ad network could also be prohibited from serving ads on the iPhone with Apple’s policies. The result of this would be a more device-centric, fragmented, mobile advertising market. Already Steve Jobs is promoting Apple’s iAds as a revolutionary ad format optimized for the iPhone and iPad. RIM and Google could be forced to develop and tout their device-centric ad formats.
And thus, advertisers would be encouraged to go to each device manufacturer for the ad formats that promise the best clickthrough rates. It would be a nightmare however for advertisers and agencies to have to split their spending between all the different networks. Advertisers hate fragmentation. They love scale: buy once, plaster everywhere.
Currently, advertisers can go to a mobile ad network like Millennial, AdMob or Jumptap, and be able to target Blackberry, iPhone and Android users. Developers will of course go where the money is. This would be disastrous for the remaining independent ad networks, who would all still be able to advertise on the iPhone, but would face a world where they are fighting with the world’s largest technology companies over mindshare and inventory.
A device-centric mobile advertising world would deviate radically from the way the web’s advertising networks operate today. It would be as if Dell, Apple, HP and other laptop manufacturers decided to buy ad networks to control a piece of the ad dollars spent to reach people on their computers. Or if browser developers such as Microsoft, Firefox and Chrome decided to only allow publishers to serve ads through their ad networks. It sounds completely absurd.
But that is the way things could shake out. There are only two things holding Apple back right now: the FTC and the ire of advertisers. The first is not much of a deterrent, but the second should give Apple pause. Making life more difficult for advertisers is no way to start a relationship.
Photo Credit/Flickr/AussieGal
Started by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple has expanded from computers to consumer electronics over the last 30 years, officially changing their name from Apple Computer, Inc. to Apple, Inc. in January 2007. Among the key offerings from Apple’s product line are: Pro line laptops (MacBook Pro) and desktops (Mac Pro), consumer line laptops (MacBook) and desktops (iMac), servers (Xserve), Apple TV, the Mac OS X and Mac OS X Server operating systems, the iPod (offered with...
Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps and YouTube. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing them with a rich source of information....
Research In Motion (RIM) is a Canadian designer, manufacturer and marketer of wireless devices and solutions for the worldwide mobile communications market. The company is best known as the developer of the BlackBerry smart phone. RIM technology also enables a broad array of third party developers and manufacturers to enhance their products and services with wireless connectivity to data. RIM was founded in 1984. Based in Waterloo, Ontario, the company has offices in North America, Europe and Asia Pacific.
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