"It certainly shows a lot of promise; when media consumption for
songs, movies and TV shows are targeted with ads, there are a lot
of inferences potential advertisers could take advantage of," said
Phuc Truong, U.S. managing director for Havas Digital mobile agency
Apple's iAd targeting is based on anonymous, aggregated iTunes
data and proprietary methodology, said an Apple spokesman. While
some third-party companies can claim they know what magazine, media
and music-consumer segments consume, iTunes knows exactly what's
been downloaded. "From a targeting perspective specifically, the
value of the data that Apple controls via iTunes certainly
differentiates it in the marketplace," said Jaspreet Singh, who
leads mobile strategy for SapientNitro.
Apple has begun to carve out profiles for advertisers. To reach
executives, for example, Apple suggests targeting business,
finance, news and classic-movie lovers. For hybrid electric or
electronics brands, Apple steers advertisers toward users with high
household income who like alternative music and health-care and
Music targeting is hardly an exact science, but some say it
works. Name-that-song app Shazam has matched demographic profiles
with music genres and run Trojan ads against love songs. "There are
definitely high-quality assumptions that we can make based on
music," said Evan Krauss, exec VP-advertising sales for Shazam,
which has also targeted love songs for Godiva on Valentine's Day.
"But the best indicator is performance, and we do see that this
stuff works. There hasn't been an instance where it hasn't."
For an automaker, Shazam presented ads for three different cars
based on music tastes: users that used the app to figure out the
name of techno or dance songs saw ads for the hip, cool sports car;
'80s music listeners saw the minivan; and pop music got the
Even though Apple's sitting on the motherlode of
content-consumption data and a handful of new ad-targeting patents,
the master marketer hasn't yet found the holy grail: reaching the
right customers at the right time under terms agencies can stomach.
In fact, the new targeting hasn't yet gotten off the ground, in
part because there's so little iAd inventory out there.
Some agencies that have asked to use the new targeting methods
for their clients have been forced to backpedal on those plans,
said two people familiar with iAd campaigns. The problem is that
when sliced and diced down to a music genre, there simply may not
be enough inventory for such a new platform. Inventory for iAd will
likely increase as more new iPhones and iPads hit the market. While
there are 100 million Apple devices out there, only a fraction run
the software that can support iAd, but all devices sold from here
on out will.
Apple launched its mobile ad unit last year, after it acquired
the mobile ad network Quattro Wireless. The rich-media ads, which
look a lot more like apps than the typical mobile creative,
launched at a premium: minimum budgets of at least $1 million.
After a couple months out, Apple dropped the entry price to
$500,000 per campaign to bring in a wider range of advertisers.
That's more than double the usual mobile ad budget of $200,000.
The premium pricing, limited targeting and additional
constraints, like not being able to cherry-pick the specific apps
against which ads will run like one can with other ad networks,
have also proven to be points of frustration for mobile-ad buyers.
And Apple has been close to vest with data on what demographics use
its different devices, even though device targeting is one option
"For those brands that haven't been pushing the envelope in
digital, it's hard to make [our clients] understand how the
economics work," said Sapient's Mr. Singh.