Six years after launching its iAd business to serve ads to mobile devices, Apple is reportedly pulling the plug. According to a report from Buzzfeed, sources familiar with the matter said the company was shifting its focus away from advertising, due to the business never really getting off the ground and the high costs associated with keeping it running.
Apple lets businesses promote their campaigns on apps and devices
However, the company said that it wasn’t shutting down iAds. Instead, Apple will phase out its sales team and modify the platform so publishers can easily sell through it. All this could happen as early as next week.
That might spell bad news for tech companies such as Rubicon Project which are currently helping to buy and sell inventory through the site. A source said:
“The big publishing groups will just fold programmatic buys into the stuff they’re selling across all their properties.”
Launched in 2010, iAd ran mobile campaigns from large brands such as AT&T and Best Buy, with commitments up to $60m.
However, generating just $487m from iAds in 2014, Apple has been stuck far behind competitors Google and Facebook in the mobile ad revenue game. Last year, its net US mobile ad revenue share was just 2.8%, compared to Google’s 35.2% and Facebook’s 16.7%.
Apple iAd share – small piece of the pie
Greg Sterling, VP of Strategy and Insight, Local Search Association, says:
“Advertising was never a business Apple was culturally comfortable with. Think about Tim Cook’s recent criticisms of the use of personal data by online ad companies. Apple also greatly underestimated how challenging it would be to make iAd successful.”
However, ad industry experts familiar with the new iAd self-serve plan, remain positive. An unnamed source said:
“I think this is going to be great for publishers. It gives them direct dialogue with their customers as opposed to forcing them to go through an Apple middleman. Access will be more plentiful and easier to manage – theoretically.”