Apple's iAd program never really took off, and it has never been responsible for a large portion of the company's sales. Apple that is better known for its iPhones and other "i" products, acknowledges that selling ads isn't what the company is good at.
Six years after launching its advertising platform, Apple is phasing out its in-house iAd sales team in favor of a new publisher-driven system. And to make this happen, Apple dismantles its iAds sales team and turn the platform over to publishers.
Apple first announced its first foray into advertising in 2010. At the time, the company's co-founder Steve Jobs had a new vision of mobile advertising. Saying that the ad serving at the time "really sucks", Jobs said that iAds would be better. But years later, things turned out differently.
iAds was meant to serve slick and interactive ads inside iPhone and iPad apps without users having to leave the app they were using. The method did rise an early buzz, expecting that the platform would be a success, and be worth far beyond Apple's $275 million acquisition of Quattro Wireless (mobile advertising in which iAd is based).
While things do go as expected on one side, Apple has put a high cost on it. This was the main reason for its failure. At launch, iAd's minimum buy-in fee was at $500,000 and despite several price cuts, Apple has struggled to get advertisers it wanted on board.
The company tried to make several improvements over the years as its attempt to revive the platform, especially when iTunes Radio was launched. But the strategies weren't giving iAd the bright future Apple wanted it to have.
The problem added as Apple’s sales tactics had strong opinions about the creative process. And with its tight control over marketing data, the company also refused to share data.
Apple wanted to pilot everything. And in the fast-paced advertising universe, people don't want any of those.
iAds never really does any much good to Apple. CEO Tim Cook said in 2014 that iAd was actually a "very small" part of Apple's business. That is definitely true for a company its size that thrive from Macs, iPhones and many "i"-related devices.
Since iAd isn't going anywhere up, the company is getting out the advertising-sale business by shifting it to a more automated platform. This means that Apple's direct involvement in the selling and creation of iAd units has come to an end.
"It's just not something we're good at," said a source from Apple.
Apple is leaving the creation, selling, and management of iAds to those that can do best. And there are no one who could do it better other than the publishers themselves. By phasing out its direct involvement on iAds, Apple is updating the platform to allow publishers to sell ads though it directly. Furthermore, Apple isn't going to take a large portion of the sale. In fact, publishers can keep 100 percent of the revenue they generate.
In September 2015, Apple made the first steps towards automating iAd with an iAd Workbench update that added several tools to allow publishers to sell ads themselves in Apple News. Apple is also expanding its Apple News model to the App Store and other platforms, allowing publishers to sell directly.
This can be a good thing to most people. For end users, the impact should be minimal. But to giant ad tech companies that have been overseeing the programmatic and automated demand-side ad buying, the news aren't good for them.
Apple's step back from controlling iAd is the company's honest acknowledgement. It's just a way to silently saying how it underestimated the business would be.
Further reading: When Apple Is Competing Against Google In Online Advertising, Everyone Is Involved