Here's The Story Of How Steve Jobs Decided He Would Take 50% Of The Mobile Ad Market

Steve jobs presents apple iad mobile advertisingREUTERS/Robert GalbraithSteve Jobs unveiled iAd in 2010.

Steve Jobs unveiled Apple’s mobile advertising platform–iAd–in 2010 with a big claim:iAd would instantly take 50% of the mobile ad market.

Jobs touted some of the brands that had committed to iAd: Nissan, Chanel, Best Buy, and others.

“We think we’re off to a pretty great start and we’ll report back to you on how we do,” Jobs told the audience at Apple’s developer conference, WWDC, in 2010.

Apple was going to become a major player in advertising overnight, it seemed. But, it turns out Jobs had a funny way of getting Apple to the 50% mark.

According to a former iAd employee, in 2010 Apple estimated the entire mobile ad market at around $US250 million.

But Apple was only looking at the second half of 2010, so the market was closer to $US125 million in its eyes.

So Jobs sliced that figure in half and gave the iAd team 7 and a half weeks before WWDC to sell roughly $US65 million in ads. That would give Apple approximately half of the global market share for mobile display ads, instantly.

By estimating the market and setting a firm goal, Jobs got the talking point he wanted.

Ultimately though, Apple’s iAd program flopped.

The inaugural iAd campaign struggled largely because Apple pegged the minimum commitments way to high for marketers. Apple also refused to yield any control over iAd to marketers, insisting it knew how ads should look and run on mobile devices.

When the halo dimmed around iAd, Apple had to cut prices. Within months of the announcement people in the industry were saying the business was doomed.

“They had a hard time keeping the shine on [iAd],” our source said. These days, iAd is an “irrelevant player in a hyper growth industry” dominated by the likes of Facebook, Google, and Twitter says our source.

The most dynamic thing to happen to iAd recently is its integration with iTunes Radio. Apple hoped that linking the two products would galvanize iAd, but this hasn’t done much. Still, our source said iTunes Radio integration “has been nothing but disappointing” for iAd.

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