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We’re not used to Apple being bad at something – the sleek and minimalist brand is usually associated with sky-high success. However, after failing exceptionally bad for almost 6 years, Apple wants out of the mobile advertising business.
According to recent reports, the Silicon Valley company is gradually phasing out its iAd mobile ad sales team and transforming its iAd network into something else. Even though the iAd service will continue to exist, Apple will allow access to external advertisers and publishers.
Apple is basically washing its hands of iAd, as it wants no direct involvement in selling or creating the iAd unit. This is how the company’s ad business was intended back in 2010 when Steve Jobs had launched it.
According to Jobs’ frank description of the mobile advertising platforms back then, “they sucked,” so iAd was supposed to be a solution. Unfortunately, the former CEO couldn’t predict that Apple itself will suck at it as well.
Finally, something Apple is not good at
Four years later, iAd was still bringing in embarrassingly few earnings, accounting for roughly 2.5 percent of Apple’s quarterly revenue. In 2015, that number actually increased to 5 percent, but the company was still far from the kind of ad revenue that Google and Facebook were seeing.
According to a source’s statement for BuzzFeed, Apple has finally conceded that the ad business is just “not something we’re good at.” The revamped, automated iAd platform will become accessible for app publishers.
With the changes, Apple has decided to allow publishers to keep 100 percent of the ad revenue. The shift will happen very soon, as early as the end of this week; the iAd sales team will be offered buyouts.
Initially, the iAd network was designed for publishers to offer in-app ads on iOS. Remember the now-defunct iTunes Radio service? Apple was relying on the free platform to woo advertisers in.
Instead of using the same type of audio ads, Beats 1 – iTunes Radio’s replacement – opts for sponsored audio mentions. But why does this change matter?
Forced to do a 180 for being too controlling
There are several reasons why Apple’s iAd network didn’t gain traction with mobile advertisers. For example, setting the minimum spend at $1 million was definitely a turn-off for a lot of smaller advertisers who couldn’t afford that.
But when Apple refused to share customer data with advertisers, the company basically signed the platform’s suicide note.
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