Apple's mobile ad market share surges as Google, Microsoft decline

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Apple's (NASDAQ:AAPL) fledgling iAd network will control 21 percent of the U.S. mobile advertising market by the end of 2010, according to research firm IDC. By year's end, iAd (which formally launched July 1) will be running neck and neck with rival Google, IDC forecasts--a year ago, Google accounted for 27 percent of the U.S. mobile ad market when combined with mobile ad network AdMob, which it officially acquired earlier this year, but as 2010 closes, its share will slip to 21 percent. Apple's emergence also spells trouble for Microsoft, which IDC anticipates will decline from 10 percent a year ago to 7 percent, as well as Yahoo (12 percent to 9 percent) and Nokia (5 percent to 2 percent). Independent mobile ad networks are faring much better, however: IDC believes Jumptap's U.S. market share will increase from 10 percent in 2009 to 13 percent in 2010, while Millennial Media will rise from 9 percent to 11 percent.

Apple first announced iAd in April 2010, months after acquiring mobile ad network Quattro Wireless for $275 million. iAd promises advertisers rich media promotions that keep users within mobile applications instead of transporting them somewhere else--prior to launch, Apple CEO Steve Jobs stated marketers had already committed $60 million in ad spending to the new platform. An Apple spokesperson tells BusinessWeek that the number of brands committing to iAd campaigns has doubled since June--Unilever's North American media director Rob Master adds that the company is "extremely happy" with its iAd campaign, introduced in July, noting that more than 20 percent of consumers who click on the iAd promo (which features video content and an interactive game) revisit the ad a second time.

The iAd launch has experienced its share of hiccups, however. Last month, The Wall Street Journal reported that among the 17 iAd partners Apple named prior to the system's July 1 rollout, only Unilever and Nissan officially unveiled campaigns for the duration of the month--Citigroup, the Walt Disney Company and J.C. Penney have since launched iAd campaigns, and other confirmed partners remain in the mix. However, luxury brand Chanel--another announced iAd partner--said it no longer has plans to introduce a campaign, declining further comment. Marketers blame the delays on Apple's insistence on retaining tight creative control over the iAd development effort--execs say the average iAd requires eight weeks from inception to completion, far longer than the norm for mobile ads. One source said the actual ad creation process, supervised by Apple, typically requires two weeks longer than anticipated. Another headache: Apple does not inform marketers where their iAd campaigns will appear, and does not allow advertisers to limit where their ads do and do not run.

For more on iAd's growth:
- read this BusinessWeek article

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