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This post is by Andy Grossman, a SmartBrief contributing editor covering telecommunications and technology.
Americans love rivalries. Yankees vs. Red Sox. Coke vs. Pepsi. Democrat vs. Republican. No room for a third party here. Similarly, pundits and the media like to view things in terms of black and white; there’s little room for shades of gray. Dichotomies rule. Corporate chiefs like to keep it simple as well. To keep the troops fired up and their eyes on the prize, execs love to play the “Us vs. Them” game.
Last summer, Google and Apple partook in this little exercise in the new arena of mobile advertising. Lots of trash talk all around. The media, eager to feed on the Apple-Google animosity, happily played their role as PR agents, parroting Steve Jobs and company’s lines amid headlines such as “Google and AdMob Ready to Take on Apple iAd.”
The conventional wisdom ran that Apple’s $60 million of corporate commitments, an engaging rich media platform and a brand name worth its weight in BMWs, iAd in no time would steamroll AdMob’s low-tech platform.
Fast-forward a year later:
- iAd hasn’t become a dominant platform.
- The mobile ad business is a multi-player game with independent companies playing major competitive roles.
- Developers have huge issues with both iAd and AdMob’s platforms.
- Advertising agencies are still by and large sitting on the sidelines, just dipping their toes in the water.
Apple has no intention, at least for now, of aping the broadcast TV networks — or even Google — in trying to reap billions in ad revenues. Apple wants to sell ads so that developers will be happy to write apps for iPhones and iPads. So does Google, but that’s its core business. Apple is a consumer electronics company: Ads play an ancillary role.
Google, too, has issued feints: Recall its Nexus One smartphone. It did not make anyone forget the iPhone.
“My sense is that Apple has no more intention of dominating the advertising business than it did the music business,” says eMarketer senior analyst Noah Elkin.
But just because iAd hasn’t set the world on fire doesn’t mean it has failed to make an impact. “The impact of iAd was more in the example it set for the industry,” Elkin says. “There have been many other companies in the mobile advertising space … that have come out with rich media displays for in-app smartphones.”
Since wireless remains merely an experimental media to advertisers, revenue figures — which remain well below $1 billion — are almost irrelevant as is any supposed Google and Apple rivalry. Think of the early 1980s when cable was merely a pup or the Internet of the 1990s.
“There are a lot of opportunities in mobile and in-app advertising,” notes Brad Adgate, the senior VP and head of research for Horizon Media, who loves mobile’s ability to reach consumers closer to their point-of-purchase, as well as the platform’s targeting possibilities.
But both iAd and AdMob have a range of issues to resolve before Madison Avenue begins to pay serious attention — concerns that have been well chronicled in blogs and the media.
“The business model is going to evolve to something where everyone gets comfortable with the process. There are lot of back-end issues that have to be resolved,” says Adgate.
Google and Apple represent the two largest wireless platforms, Android and iOS, but those distinctions are almost artificial. Google makes tons of search money on iPhones. ESPN competed with CNN for ad dollars in 1985, but they reveled in each other’s success. The rising tide lifted all boats.
Similarly, Apple’s brand and other engaging qualities apps will lift the entire industry as will the openness of Google’s platform. On the ad side, forget the Hatfields and McCoys.