Why Apple’s iAd platform is a ‘tough slog’ on Madison Ave.
FORTUNE — Unveiled by Steve Jobs in June 2010 with a promise of new generation of low-cost mobile ads that not only didn’t “suck” but would have users coming back for more, the iAd platform was supposed to be Apple’s (AAPL) answer to Google’s (GOOG) AdMob.
But advertisers didn’t exactly fall over themselves to fork over the minimum $1 million Apple required for the privilege of creating what are essentially miniature motion pictures on the screens of iPhones, iPads and iPod touches.
So Apple made some concessions. It raised the developers’ share of the ad revenue from 60% to 70%. It lowered the minimum ad buy to $500,000 (Feb. 2011), $300,000 (July 2011) and finally $100,000 (Feb. 2012).
But Apple’s sales calls on Madison Avenue are still a “tough slog,” according to Kate Kaye’s piece in this week’s Advertising Age. Reason: The company’s refusal, in her words, “to cough up enough of the consumer data that attracts advertisers to them in the first place.”
Like Google and Amazon (AMZN), Apple sits on what Kaye describes as “incredible troves of information about what consumers actually buy and like, as well as who they are and where they live.”
But Apple is reluctant to share the personal data collected from its 600 million iTunes accounts, making it, according to one ad exec, “the best-looking girl at the party, forced to wear a bag over her head.”
There’s also diffidence in Apple’s ad sales pitches, says GroupM’s Cary Tilds, perhaps reflecting the fact that U.S. advertising generates only 0.15% of the company’s annual revenue.
“It’s not their main focus,” she says, “to tell everyone in the world how amazing advertising in iAd is.”