Finally, Apple Has A Mediocre Product Launch

Apple CEO Steve Jobs

Apple has grown used to launching a new product and quickly revolutionizing an industry. Over the past decade, it has done this with the iPod, iPhone, App Store, and iPad.

But it is having a tougher time revolutionizing the advertising industry with its mobile “iAd.”

While the ads themselves look very nice, have drawn incredible curiosity, and have inspired competitors to offer iAd-like products, they are still a tough sell.

Apple recently chopped the minimum iAd purchase in half, to $500,000, from $1 million. That should help. And the fact that it’s Apple still means that they are getting meetings with everyone under the sun, we hear.

But we also hear that iAd salespeople still don’t have freedoms they would have elsewhere, like wiggle room on ad rates; that the minimum buy is still too high for most campaigns; and that salespeople don’t know — or can’t tell customers — what direction the iAd platform is going in.

Then, there is still the control issue. Most agencies and brands want some. Apple still has it all.

Agencies still seem frustrated that they still can’t do things like plug third-party measuring systems into iAds, and still don’t have transparency into things like which apps their clients’ ads appear in.

One top agency executive — the kind of person Apple should really want to have in its pocket — recently told us that while he is happy to work with his clients on iAds, he would never recommend one.

And separately, we’ve heard of some big iAd-like campaigns running through rival ad networks instead. These were 100% iPhone-targeted, rich media ads for blue chip advertisers, which, for every other reason, should be iAds. But they weren’t.

These sorts of issues are causing some iAd salespeople to start looking for work elsewhere, says an industry source, who has started to see resumes from Apple employees. If your salary relies heavily on sales commissions, and you have a product that’s hard to sell, that may not be the best fit. (Though, in fairness, perhaps those are the wrong people to be working at Apple, then.)

A second source, a recruiter, says that Apple’s iAd division seems to have had a tough time attracting and retaining talent. Once the gloss factor of working for Apple wears off, this person says, people realise it isn’t a media company.

Apple is currently advertising 21 iAd openings, including two sales planner positions in New York posted this week, a regional sales manager opening in Los Angeles posted last month, and a business development manager opening in London, posted in January.

Sources familiar with the iAd operation say that while some people have left since Apple acquired Quattro Wireless, there is no mass exodus or panic or anything like that. And turnover is typical when a startup gets absorbed into a huge company. Many people have left Google since it purchased AdMob, for example.

And, while publishers still talk about crappy iAd fill rates, Apple is selling iAds to top brands. A quick glance at a few iPhone apps turns up iAds for Citi and Dove — both return advertisers. People on Twitter have recently mentioned seeing iAds for Nissan and Coldwell Banker.

Apple CEO Steve Jobs doesn’t like losing, so we expect to see the company continue to invest in iAds. Whenever Apple announces new features for its forthcoming iOS 5 — perhaps in April — we expect to hear more about the future of the iAd.

And — bigger picture — mobile advertising is still in its infancy. There is plenty of time for Apple to iterate and to make the iAd a successful business.

But it may have to loosen up some more. And with Jobs — a very controlling executive — still in command of the company, some wonder if operating a successful advertising operation is even within “Apple’s DNA.”

Apple did not respond to our request for comment.

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