Sources within Apple have reported that they will be delivering new video iAds this year that will automatically play full-screen within iPhone and iPad apps. This is will be music to the ears of advertisers who currently can only deliver clickable mobile banners for the video to play. The sources are predicting that the ads, which will look a lot like TV commercials, will play at moments of transition, such as when you complete a game to a certain level or click away from an article, rather than interrupt a favorite activity.
Apple Ad Exchange: Monetizing Apps
Oh and if you didn't notice - Apple quietly rolled out an Ad Exchange a few weeks ago. It's a real-time bidding exchange to automate selling in-app ads, multiple sources have reported to Ad Week. Apparently Apple's sales team has been integral in helping developers monetize apps; most of the revenue from existing iAds comes from in-app advertising. It’s not clear whether the new Apple exchange will be limited to mobile, because it could sell real-time iAds across devices—or even through Apple TV, according to an insider.
Ad Week is saying that details of the Ad Exchange are hard to come by, as are any details on how the iAds will be sold and at what price. So far there's no news on whether they will be auctioned or sold by the more profitable route of direct sales, and Apple did not respond to a request for comment.
According to Ad Week, the reason for the emergence of these in-app video ads may be a response to a reported low level of interest in the existing ads from advertisers. The mobile microsite style ads initially carried a $1 million price tag, dropping to $100,000 over the years, even as Apple has added features like maps.
Apple Will Still Lose Out on Market Share of Mobile Ad Revenue
In terms of market share EMarketer projects that this year only 3% of net U.S. mobile ad revenue will go to Apple, compared to Google's 50% and Facebook's 15% share. Apple is predicted to only grow it's share by 1% in the next 12 months. Industry experts are expecting that the new video iAds' full-screen video real estate will attract advertiser's interest enough to test as part of their existing wider deals with Apple.
AdWeek also reported recently that a small number of advertisers spent up to $10 million to become iTunes Radio launch sponsors last year. This included an ability to run full-screen video ads limited to Apple's streaming music service. We can probably assume that the user response has been favorable enough for Apple to consider bringing in the new iAds to their apps too. This clearly shows that if the native context is right then the ads are accepted by subscribers and of real interest to the big money.