Here's everything we know about how iAd will work with iRadio, Apple's new streaming music service set to be unveiled next week at WWDC, Apple's developers conference:
- For mobile advertisers, Apple has the best device ecosystem of any manufacturer (it owns both the devices and the operating system which rides on them).
- But iAd has been a huge flop. Advertisers stayed away, and poured money into individual publishers like Facebook and Pandora instead.
- Bloomberg reports that some people among iAd's 200-strong staff had long sought a greater tie-in with iTunes.
- Apple has already been in negotiations with OMD, the Omnicom media buying group, for sponsors for the new music streaming service.
- Apple currently shares about 60% of ad revenue from iAd with the developer on whose app the ad appeared. It's not clear whether that 60/40 revenue split will continue when iAd begins fueling iRadio.
- iRadio will be a huge boost to music marketers. Currently, iTunes has limited music "discovery" features for users. People have to pretty much know what they want to hear before they go in to iTunes to find it. By streaming music based on users' taste, users will hear new music automatically — and many will want to buy it. Pandora already carries a "buy" button feature on all music it streams.
- Investors expect Pandora's business will take a hit when "iRadio" launches — P's shares dropped 11% on the news.
- iRadio is being driven by Eddy Cue, the svp who oversees iTunes, App Store and iAd, and Todd Teresi, whom Apple hired last year from Adobe to lead iAd sales.
- There are rumors Teresi wants to launch an ad exchange, like Facebook's, with iAd. (Pandora has also considered fueling its ad system with a private exchange.)
- iAd recently earned Media Ratings Council accreditation, which means it has verifiable audience metrics. It's the first mobile system to get such accreditation.
- Apple launched IFA in iPhone 5/iOS 6 last year, allowing advertisers to track iPhone users. (IFA is a rival tracking system to Androids' cookies.)
- Revenue on its iAd system jumped from $95 million to $125 million in 2012, according to IDC.
- iAd now handles 15% of display ad revenue, per IDC.
- But mobile ad revenues as a whole doubled in 2012 — so Apple fell behind.
- Apple even began taking alcohol ads inside iAd, which Jobs didn't want. Whenever media companies lower their standards for advertisers, it's a sure sign they're struggling for clients.
- And, of course, iAd promotions continue to set the standard for creative beauty in mobile.
