Apple Abandons iAd, Unexpected Benefits for Google

By | June 11, 2016

Apple Inc. has announced that it is abandoning support for iAd on June 30, 2016. Developers will continue to earn revenue until that date. After that date, Apple will stop serving ads, and will provide a final payout of earnings to developers in September of 2016.

iAd was Apple’s mobile advertising platform for iOS devices like iPhone and iPad. Developers could incorporate simple iOS API’s in their mobile applications, and have ads served up by Apple. Developers received a share of the revenue produced by the ads with Apple.

According to Apple, the API’s are being deprecated, but should not cause developer’s applications to crash. Ads will simply stop being served.

Apple’s original announcement in January was very brief and did not make it clear if the API’s would serve ads from third parties. It did not seem clear from the initial posts that the change would affect developers. It sounded like iAd would still present third party ads, but that Apple was getting out of the business of soliciting and selling ads directly.

More recent posts from Apple have made it clear that this is not the case, and the API’s will no longer serve up ads, and that the API’s have, in fact, been deprecated.

Why is Apple Doing This?

Apple has apparently been unable to grow its market share in the mobile advertising business from around the 5% level, in spite of the fact that the iOS platform accounts for more than half of the mobile advertising market. In fact, it is reported that 75% of Google’s mobile ad earnings come from the iOS market.

There has been speculation that Apple, unable to grow its market share, in spite of the flourishing ad market for iOS, has decided on a new ad-free strategy, as a way to counter Google.

Consequences for Apple?

Whatever the reason, I think this is a mistake for Apple. Even if iAd was losing money, which I’m not sure it was, it is a drop in the bucket for Apple. iAd was, however, a very simple means of monetizing apps for developers, and the ads were served in a customer-friendly way.

It was a way to make the iOS platform more favorable to developers. It kept the developer in the Apple ecosystem.

Now those developers will seek a new ad platform. Most likely, it will be Google AdMob, since it is the leader in that space. Now, that ad revenue is going to one of their biggest competitors. And developers are being exposed to a small part of the Google ecosystem. That may be the “foot in the door” for Google to get those iOS-exclusive developers to finally make the jump to also support Android. It is certainly making me revisit this question.

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