14 DAY TRIAL // Apple is reportedly cracking open the advertising space making room for its own platform, iAd, speculators believe. Sources in a position to know claim that Apple has every reason to do this, especially after acquiring Quattro Wireless, a firm specialized in ads.
The New York Post outlines that, “Regardless of whether it announces the ‘iAd’ today, industry observers believe it is only a matter of time before Apple gets into the ad business,” although Apple isn’t set to announce anything until tomorrow, when the company’s confirmed iPhone OS 4.0 event kicks in.
The paper includes a statement from Max Mead, vice president of PointRoll, a provider of so-called rich media ads. Referring to Apple and its modus operandi, he stresses that “They [Apple] are typically pretty smart at how they look at new areas and segments.”
The paper then goes to mention the hyped Quattro Wireless acquisition by Apple, which took place in January, when the mobile ad firm’s assets went over to Apple in exchange for some $275 million. The New York Post relates that, “Apple hasn't disclosed its plans for the firm,” as if it would have, given other circumstances, “but there is no shortage of theories,” it adds.
Being the curious bunch that we are, we continued reading through the report, which also included a few noteworthy observations from Mr. Josh Lovison, who heads IPG Media Lab's mobile and gaming practice. Their brainstorming reportedly came up with this bottom line:
“They're definitely aiming to move into advertising,” Lovison said. “They didn't acquire Quattro to do nothing with it.” (emphasis ours)
Wow! Good thing we have people like Lovison giving us the heads up on Apple’s plans by offering their theory that “[Apple] didn't acquire Quattro to do nothing with it.” Really insightful stuff! Next thing you know, Piper Jaffray analyst Gene Munster (who sometimes omits stuff) will tell us that Apple’s acquisition of Quattro Wireless will materialize into some form of advertising platform, not necessarily integrated into the iPhone OS, not necessarily not integrated either, within the next half a decade or so.
A modified screen capture from Apple’s famous 1984 ad
Credits: theinspirationroom.com
On a more serious note, we’d like to extrapolate the reasoning behind this otherwise accurate impression that Apple will, one way or another, make room for itself in the advertising space.
Long story short, Apple was late to bid in the acquisition of AdMob, the leader in placing ads in applications that run on smartphones. Google beat Apple to it, so it bought Quattro. From where we stand (since Apple currently makes no profits from ad-supported free apps), we’d say the Quattro Wireless acquisition smells like Apple entering the advertising business. But Softpedia is no expert. And, believe it or not, as we read further through the New York Post report, we found Piper Jaffray analyst Gene Munster being quoted as believing there was “a good chance -- about 70 percent -- that Apple will roll out a mobile search engine tailored for its devices within five years.”
Note: the Munster reference above was purely from our experience with his prognostications. Interesting to see how right we were about his thoughts on the matter (probably based on months worth of research), not to mention that his opinion was actually included in the report.
Finally, Apple is said to have downplayed some offers in the past, only to step up to the challenge itself, thus retaining most profits if an iAds platform proved successful. Indeed, this sounds like Apple, and Alexandre Mars, chief executive of Phonevalley (a mobile ad agency), thinks so too: “Apple has access to so many avenues,” Mars said. “I think they have a broader ad plan.”
Finally, an opinion worth uttering.
It is safe to say that Apple could and should be interested in the opportunity of launching its own advertising platform right about now. Admittedly, we wouldn’t have seen the light, hadn’t it been for the New York Post report, and the experts’ mind-blowing analysis. But if you want our take on the matter… one of the biggest reasons Apple simply must grab a piece of the advertising pie is because they're good at advertising.