iAd, Apple’s advertising platform for apps on iOS devices like the iPhone and iPad, has been gradually building up its international business since first going live in the U.S. in 2010, and today comes the latest step in that progress: it is bringing iAds to Latin America, starting first with Brazil and Mexico and eventually expanding to other countries like Venezuela, Argentina and Colombia.
The move is the latest for Apple in a gradual attempt to build up its business in the region, one of the fast-growing emerging markets currently with 350 million unique mobile users, and projections for around a half million smartphones to be in use by 2020.
In September 2014, Apple quietly hired a new business head in Latin America, Claudia Contreras, who previously worked as the CMO for Aeromexico. Apple has also expanded its retail operations and manufacturing in the region.
But rather than establishing iAd in Latin America on its own steam, or attempting to handle sales remotely from the U.S., Apple is taking a different route: it’s linking up with IMS (Internet Media Services), a company based across the region and described by its founder and CEO Gastón Taratuta as a “market maker.”
By that, Taratuta means that IMS helps various services to build up a business, which can include introducing brands to tech companies with ad-based business models (IMS says it works with the top 100 brands in the region), helping content companies strike licensing deals, and figure out how to build up user bases.
To date, IMS has worked with the likes of Twitter, Waze, Spotify, Foursquare and LinkedIn on these and other services. Taratuta tells me that for each client, IMS builds up separate teams that work only with the individual clients, and it will be doing the same for Apple.
“We will be setting up a team that is 100% dedicated to Apple within our organization,” Taratuta says. “We don’t mix people with products. The person who educates, sells and does marketing for Apple won’t do this for other products.” On the role of new Apple hire Contreras, he says, “She was hired 4-5 months ago and she’s the main person there, but they are going to outsource pretty much everything else.”
In other words, IMS will be the “sole reseller” of iAd in Latin America, he says, as well as work on programs to introduce products like iAD Workbench and iAd Producer to local publishers and developers (which appears to be part of a bigger, global initiative).
iAd has seen some definite ups and downs in its nearly-five years of existence. After seeing waning demand from brands to pay premium prices to advertise on the platform, Apple lowered prices, four different times, taking the minimum spend from (reportedly) $1 million down to a considerably more thrifty (and realistic) $50.
Today, in the U.S., the market where it is most active, iAd ranks seventh, after companies like Google and Facebook and Twitter and Yahoo, in terms of mobile ad revenues (see table, below).
It seems that five years is a long time to wait to move iAd into a market that is effectively a neighbor to the U.S. and so closely linked in other ways. Taratuta says that this is not uncommon with Silicon Valley companies expanding internationally.
“It is very complicated to buy media and content in the region,” he says, also noting the fact that although you only have two languages, you still are dealing with a number of complicated and sometimes unpredictable economies. Because of all of this, “Latin America comes later for many companies.”
Although the price of iPhones has been fluctuating wildly because of local currently volatility, there seems to have been enough traction in the market up to now for brands to want to bite. And that’s having a knock on effect in digital advertising. According to eMarketer, mobile ad spend in 2015 is projected to be around $1.4 billion, versus $0.68 billion in 2014. Brazil and Mexico together account for about 80% of that today, Taratuta estimates.
IMS is not sharing any terms of its business deal with Apple.
Featured Image: Caio Bruno/Flickr UNDER A CC BY 2.0 LICENSE