iAd Starts Selling Programmatically

iadApple’s iAd inventory will be available programmatically through open exchanges.

Rubicon Project is one of “several advertising technology companies” that will be selling the inventory, according to a press release. MediaMath is among the other partners, according to an AdExchanger source.

iAd hasn’t been a star for Apple so far. “This partnership means that Apple is conceding that its current advertising strategy – going against market trends using a premium model targeting high spenders – has not worked,” said Sigal Bareket, CEO and co-founder of Taptica.

iAds’ market share of 2.6%, while substantial enough to place it in the top ten, pales in comparison to the market leaders. Google has 37.7% of US mobile Internet ad revenue and Facebook has 14.7%, according to figures from eMarketer.

“iAd has been a neglected asset,” said Dan Laughlin, VP of business development at HyprMX. “But with the right attention, it can become a significant player given its inherent distribution advantage and its ability to profile users based on their app usage.”

iAd has more than 400 targeting options for advertisers. Its audience is also validated, since users must create an iTunes account in order to download apps. With the release of iOS 8, Apple announced that those Apple IDs could be used by iAds advertisers to retarget users across their devices. Those capabilities make it a good fit for advertisers doing audience-based targeting, who often prefer transacting in programmatic channels.

iAd has scale: “Apple iAd’s sell-side SDK is one of the most penetrated SDKs in the industry,” said Michael Oiknine, CEO of Apsalar. “They now have added iTunes radio inventory, so it’s a smart yield maximization strategy for Apple and is akin to Facebook strategy, which maximizes inventory sales via FBX and PMDs.”

Selling programmatically will fix iAds biggest mistake, which was selling its huge network of thousands of apps for premium prices. That didn’t make sense to many media buyers, who passed on inventory they could get cheaper elsewhere.

“There was no real premium inventory offering to justify the pricing model,” said Eric Bosco, CEO of ChoiceStream. “Advertisers are savvy enough to know that in mobile they can get more competitive rates via other providers to appear on the very same apps that Apple was selling.”

“The network model is outdated,” said Julie Preis, SVP of product management at PulsePoint. “Partnering with someone like Rubicon gets [iAd] access to the ecosystem of automated buyers.”

Selling programmatically should bolster business for iAd as companies like Facebook reap the benefits of app install ads, mobile advertising’s current darling. iAd’s self-serve interface already features those ad options prominently.

For Rubicon, the deal gives it a crucial foothold in its expansion beyond display. “Rubicon and other web-born ad platforms are struggling to get strong hooks into mobile, so the ability to buy on iAd provides an instant boost in reach,” HyprMX’s Laughlin told AdExchanger.

“It shines a spotlight on Rubicon’s mobile capabilities, and shows they can progress from display to mobile to other ad units”said Sameet Sinha, a senior equity analyst for B. Riley & Co. “Until now, those capabilities were relatively unknown.”

Apple’s developers should also benefit since the partnership will give them access to an easy monetization solution.

“iAd is an important partner for application developers and by opening up the advertising inventory to third-party programmatic buyers, the advertisers, app developers and even consumers will all benefit,” said AppLovin CEO Adam Foroughi.

Allison Schiff and Zach Rodgers contributed to reporting.

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