Apple aims for targeted mobile advertising

07 July 2010

CUPERTINO, California: Apple, the electronics giant, is to launch a new initiative which it hopes will result in the delivery of more targeted mobile advertising to consumers.

The company rolled out its iAd mobile ad system on the iPhone last week, with Unilever, Nissan, Best Buy and AT&T among the brand owners that have already established a presence on the platform.

In order to build on this early momentum, Apple will study the habits of thousands of members of its iTunes service, utilising this data to create relevant mobile ads in the future.

The "standard targeting options" being examined include demographics, location, application preferences as well as netizens' favourite music, movies and TV shows.

Such a move significantly escalates Apple's rivalry with Google, which has developed similar technology for PCs and is expected to employ the same model on handheld devices.

A forecast from eMarketer, the research firm, has predicted that US mobile adspend will rise by 43% in 2010 to $593m (€471.7m; £390.7m), climbing to $1.56bn by 2013.

Currently, Apple is integrating ads into a number of applications available for download through its App Store.

The attraction of this approach is obvious, given that five billion apps have been accessed to date, according to the organisation's figures.

Despite this, some observers remain sceptical about the potential effectiveness of this channel when it comes to boosting key brand metrics.

"Right now it's hype and buzz more than reality," said Thom Kennon, vice president of strategy at Wunderman.

"There are just not that many people with iPhones in their pockets or iPads in their hands to consume this advertising."

Unilever began working with Apple in May on a campaign for its Dove Men+Care range, with the aim of connecting with married fathers in their late 30s.

"Apple then overlays that with the iTunes information and targets quite well and quite surgically," Rob Candelino, a marketing director at the FMCG manufacturer, said.

While Apple does not share statistics relating to individuals, iAd clients can leverage certain "buckets" of apps, like news or entertainment, basing their decisions on the perceived characteristics of their main users.

Steve Jobs, Apple's ceo, claimed at a recent conference that the company had sold over $60m of advertising inventory since iAd was first unveiled.

Noah Elkin, an analyst at eMarketer, suggested Apple appeals to a "premium” audience because of the cost of its products, while Google's Android has a broader reach.

"It boils down to the exclusivity of Apple and the customer you can target that way, versus the breadth that you have with Google,” he argued.

Google bought specialist ad network AdMob earlier this year, and IDC anticipates it will generate at least $100m in mobile advertising sales in the US this year. 

Data sourced from Bloomberg; additional content by Warc staff