Last Updated Jun 11, 2010 2:06 PM EDT
Online advertising has been in a funk for a number of reasons:
- There is virtually unlimited ad inventory, driving down prices so low that most companies can't make reasonable revenue.
- Ads are often obtrusive, dull, and irritating, so people ignore them.
- There have been so many issues of phishing, malware, behavior tracking, and privacy that consumers often keep their distance.
- Consumers have developed strong abilities to ignore online ads. For those that don't want to exert mental effort, there are ad blockers for browsers.
Apple control over ads on iOS apps could help counter these trends. Although the number of available apps is massive, most users impressions will come off a more limited number. In effect, iAd has limited inventory, so Apple can push for higher prices. Because it wants to create a high level of user experience, you could also expect the company to demand quality creative, which will help increase response rates and overcome user antagonism (the ads will effectively leverage Apple's brand as well as that of the advertising company) in a positive feedback loop.
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