What: Apple is bringing new video iAds hat will automatically play full-screen within iPhone and iPad apps. (Currently, someone has to click a mobile banner for a brand’s video iAd to play,)
Why it matters:Apple will sell these “interstitials” Ads through a company’s new ad exchange.
Apple will offer a new option for how iAds are presented on its iOS platform.The company is rolling out new video iAds this year that will automatically play full-screen within iPhone and iPad apps. Currently, someone has to click a mobile banner for a brand’s video iAd to play.
These new video ads, known as “interstitials,” will interrupt whatever someone is doing in app. The ads will play at moments of transition, rather than interrupting content entirely.
There isn’t any certainty on how Apple is planning to sell the video iAds or at what price. Since it’s debut in 2010, Apple has been adjusting its approach to pricing and marketing iAds. Just months after its launch, Apple cut its price of entry in half to US $500,000 from US $1 million all the way June. According to Ad week , Apple was looking to launch an ad exchange. However, auctioned-off ads are typically less lucrative than ones pitched by a direct sales team.
What is Apple up to?
A major player in mobile hardware and software, Apple remains a relatively newcomer to the mobile ad business. The company, has not reported its ad revenues but is said to not have official sales targets for its ad business. Neither has a big sales staff, according to GroupM chief innovation officer Cary Tilds.
The in-app video ads may be a way for Apple to reawaken advertisers’ interests in its iAds. Magna Global’s managing director of programmatic, Neeraj Kochar, said advertisers would likely find the new video iAds’ full-screen real estate “compelling.” However they may not immediately throw a bunch of money at Apple to buy them. “Advertisers will test into it, potentially as part of bigger deals with Apple,” he said.
However, Apple has proven recently that it can get big-budget brands to open their wallets. Many marketers wrote checks for up to US $10 million to become iTunes Radio launch sponsors last year.
Apple earned US $125 million from mobile ad sales in 2012, according to research firm IDC. By comparison Google’s mobile ad network, grossed US $243 million that year, and mobile ad network Millennial Media generated US $151 million. It is estimated that this year only 3% of net US mobile ad revenue will go to Apple, while 49% will go to Google followed by Facebook with 15%.