In spite of all the noise from Apple about iAd changing mobile advertising, six months down the line, it still doesn’t look like ad agencies are convinced. At a panel conference in New York, execs from ad agency Publicis claimed that iAd couldn’t deliver the numbers that brands were looking for. Jami Lawrence, associate director of mobile marketing at Publicis Modem said ‘it’s a really small audience—from a scale perspective not really there’. Whilst the iphone is popular it only represents a few percent of handsets at best. What’s more, for many brands those users are not their target audience. Look at retail, and the supermarkets in particular. For most of them their customers are mainly women, and for some, mainly older women. Yes, men shop in supermarkets these days, but typcially the main buying decisions are made by women.

Lack of reach is one problem for brands, but the other is the $1 million entry fee limits the network to major brands. And major brands who are willing to risk that amount in the mobile space. Publicis pointed out that typical spend on mobile campaigns is $20-$50k, which is consistent with the UK experience.

There is also a barrier to developers including iAd in their apps: the 60% payout rate from Apple may not be enough of an incentive. Added to that are the limited metrics provided by Apple. Click through rates are not enough of a measurement for today’s digital advertisers, they want to see a full run down of customer behaivour. Something that iAd cannot give. I previously blogged about Apple ditching Quattro Wireless and putting all of their eggs into the iAd basket.
Whilst iAd offers a great, interactive experience (that doesn’t take the user away from the app), that simply isn’t enough for brands. Apple have pitched their network at too high a level to make it a success. In all likelyhood Apple will make money from iAd, but it will remain a niche product. Unlike the claims from Steve Jobs, it will not do for mobile advertising, what the app store did for the iphone.