After almost six years, Apple now wants out of the mobile advertising business.
BuzzFeed, Apple is phasing out its internal iAd mobile ad sales team and shifting the iAd network into an automated platform that app publishers and advertisers can access. While the iAd service will remain in that capacity, Apple won’t have any direct involvement in selling or creating the iAd unit, as it has done since Steve Jobs launched the business in 2010.
“It’s just not something we’re good at,” a source told BuzzFeed. App publishers will now have the ability to sell ads directly through the new, automated iAd platform. In turn, publishers will also keep 100 percent of the ad revenue. BuzzFeed claims the shift will happen soon, as early as this week, and members of the iAd sales team will be offered buyouts.
The iAd network was built so that publishers could serve in-app ads on iOS. Apple also once used iAd’s sales force to lure advertisers to its free, now-defunct iTunes Radio service. Its replacement, Beats 1, does not serve the same type of audio ads that iTunes Radio once did, opting instead for sponsored audio mentions.
Why this matters: Apple’s iAd network failed to gain traction with mobile advertisers for several reasons. At the beginning, iAd’s minimum spend was $1 million, which put off a lot of smaller advertisers who didn’t have that type of budget. Then advertisers complained about Apple’s heavy-handed involvement in the creative process of the ad units. Finally, Apple refused to share customer data (which, actually, thanks Apple!).
Basically, Apple was too controlling and so now the company is doing a 180 and stepping out of the equation to let app publishers and advertisers do all the dirty work.