Reflecting on $60 Million in iAds

Yesterday in San Francisco at the Apple developer conference Steve Jobs told the audience that major advertisers and brands had signed on to be part of the launch of iAds. Among the corporate logos that when speeding by on the big screen behind Jobs were Nissan, Citigroup, Unilever, General Electric,  AT&T, State Farm, Disney, Target and several others.

This is the inaugural group that will utilize the new iAd platform when it launches in the second half of the year. Part of their motivation is undoubtedly to get the PR value of being part of this initial group of advertisers. For the time being ad performance itself is secondary. 

Jobs also said that those same advertisers had committed $60 million to iAds and he estimated (using JP Morgan figures) that Apple would control about 48% of US mobile display advertising in the second half of 2010. JP Morgan estimates that US mobile display in 2010 is going to be worth $250 million. ICP's MagnaGlobal has put the number at around $400 million, while others have larger numbers. 

Brands have been exploring and experimenting with mobile before Apple and the arrival of iAd. Meanwhile, across the country in New York, the MMA is showcasing mobile case studies and "best practices" from several large brands including Coke, ESPN, Kodak, MTV, Western Union and others.

While mobile advertising has been growing steadily and incrementally, it is now poised to accelerate because of the "credibility" that Apple and Google have brought to it and the clout that they have with brands and agencies. Being involved with iAd or the iPad at this early stage is exciting, novel and "sexy" although the effectiveness of these ad vehicles is still largely uncertain. (As an aside publishers are apparently able to get away with much higher CPM rates on iPad ads for now.)

Curiously it's as though Google and Apple have awakened marketers to mobile advertising, because of their clout, rather than the opportunity presented by the 73 million people on the US mobile Internet or the billions of page views being generated by apps.

Earlier this week Morgan Stanley analyst Mary Meeker made a presentation in which she reiterated many of the stats and data points that make the mobile market really compelling: it's rapid consumer-side growth. 

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Mobile advertising has demonstrated superior performance vs. online according to many studies to date. Despite these facts it has not enjoyed respect or sufficient visibility to generate meaningful mobile ad spending by brands and agencies. 

But Apple may have just helped change all that.