Apple’s iAd: what is the future of mobile advertising holding for us?

A long title for a very important milestone: today Apple launched its iAd mobile ad network in the US, with big advertisers like Unilever, Chanel, Turner Broadcasting and Nissan already on board. That’s practically the start for the multimedia mobile advertising market, a market resumed last year by Steve Jobs in the words „mobile advertising really sucks”.

Yes it sucks, but the iPad and the iAd network will be the first to introduce advertisers to the new possibilities of advanced mobile devices, taking advantage of the bigger, brighter and glossier screens, and of the enhanced multimedia capabilities of the tablets. Don’t count out the iPhone and the iPod Touch, as the market will grow exponentially and advertisers will flock to profit from the buzz of being among the first to use such a platform in a creative way.

However, iAd is restricted to Apple products, therefore the market will soon follow and develop a strong and real offering for other mobile devices allowing clients to advertise more efficiently and publishers to monetize traffic coming from mobile, which is currently lacking in revenues.

What is the future of mobile advertising, after reaching this milestone today?

First of all, prices in the iAd platform are very high, only big and very big companies being able to pay at least $1 million for an ad campaign. Perhaps Apple will reconsider this revenue strategy later on, but for the moment they are letting others profit while focusing on the big clients. And profit they do, from old-style mobile advertising: SMS advertising, direct marketing and other things alike. For ROI-oriented companies, these avenues for advertising bring proven results, and will remain a major factor when talking about mobile ads, especially when realizing that iPhone users account for a mere 4% of the total number of phone users in the EU.

Secondly, the new wave of hardware products (from Apple but also from the competition) will benefit from location-based features that will enable for example Facebook advertisers to focus their campaigns in an extremely targeted manner. When the privacy wars will be over, mobile users will ‘benefit’ from ads popping up on their mobile devices according not only to their (already acquired) social profile, but also according to their location – if they choose to. This will be by far the most important revenue source for publishers and the most important targeting avenue for advertisers – in fact, the Holy Grail of any advertiser: targeting the individual consumer with a multimedia message adapted strictly to his/hers desires/way of life/interests.

Until then, Jobs already pocketed $60 million from the first iAd advertisers, while jump-starting an industry focused until now on delivering direct marketing messages. With iAd, the market opens up also for branding purposes. And the big fat dollars that come with it.