Apple exits the ad business, handing iAd over to publishers

Six years after Steve Jobs launched iAd, Apple has decided to dissolve the platform and hand it over to publishers. Publishers will then be in charge if ad management duties and revenue since Apple will no longer be able to charge its 30% fee. Responding to questions on why this decision was made, Apple responded, "it's just not something we're good at". This move gives weight to comments from Apple's SVP of Internet Software and Services, Eddy Cue, that the company is working on a self-service ad-buying tool for publishers serving content through the iOS 9 News App. According to eMarketer, Apple's iAd failed to be the end-all in-app ad platform that Apple hoped it would be, it took a mere 1.5% of the mobile advertising space in 2015 compared to Google;s 9.5% and Facebook's 37.9%.  

Announcing Apple’s first foray into advertising back in 2010, company co-founder Steve Jobs promised a new vision of mobile advertising. The current one “really sucks,” Jobs said. iAds would be better, serving up slick interactive ads inside iPhone and iPad apps without users having to leave the app they were currently using. And iAds did exactly that, but their high cost and Apple’s early control-freak stewardship of their development hamstrung their broad adoption. They never really took off, leading CEO Tim Cook to concede in the fall of 2014 that iAd was a “very small” part of Apple’s business.

Now, six years after launching iAd, Apple is stepping back from it. Multiple sources familiar with the company’s plans tell BuzzFeed News that Apple is getting out of the advertising-sales business and shifting to a more automated platform.

While iAd itself isn’t going anywhere, Apple’s direct involvement in the selling and creation of iAd units is ending. “It’s just not something we’re good at,” one source told BuzzFeed News. And so Apple is leaving the creation, selling, and management of iAds to the folks who do it best: the publishers.

Apple is phasing out its iAd sales force entirely, sacking some 100 employees. It is also updating the iAds platform so that publishers can sell through it directly. Publishers who do so will keep 100% of the revenue they generate. It's not clear what this means for Rubicon Project, MediaMath, and the other ad tech companies that had been overseeing programmatic, or automated, demand-side ad buying on the platform, but it doesn't look good. Since everything can be done directly through the updated iAd platform, it's likely that most of it will. “The big publishing groups will just fold programmatic buys into the stuff they’re selling across all their properties,” one source explained. iAd sales team members will be offered buyouts and released into the wild. The move is coming soon, perhaps as early as this week.