Apple's iAds Boosts Startups

The launch of Apple’s iAds service back in July has given an unanticipated boost to other mobile advertising platforms. Ad startups and established players have seen increased interest from companies in their services, and many are capturing new customers by exploiting shortcomings in the iAds system, according to a report.

Apple’s high profile launch of a mobile advertising platform caught the eyes of big brands who then increased their mobile ad budgets, according to the Wall Street Journal.

Apple “brought sexiness to mobile ads,” Sprout Inc. CEO Carnet Williams is quoted as saying. The San Francisco-based Sprout launched almost three years ago and produces ad campaigns across mobile and social networks. Since the launch of iAds, the number of calls from publishers and agencies has quadrupled, according to Williams.

Apple’s high rates, service delays, and onerous creative limitations have caused problems for Apple. Back in October, iAds reportedly lost a $10 million account from Adidas after Apple rejected its ad concepts three separate times. Referring to Apple’s unusual level of creative control over iAds campaigns, a source cited by the Silicon Alley Insider referred to Apple CEO Steve Jobs as a control freak.

The shortcomings of iAds have created openings for rivals. New York-based ad startup Medialets gained an account for Chanel SA after the luxury brand learned that it could get many of the same services that iAds provided, plus access to Apple iPads and other devices (which iAds doesn’t support).

When iAds launched, many smaller mobile ad companies were worried about the competition. And while Apple’s presence does mean there’s a giant with a strong hold over one family of mobile platforms to contend with, it also brings with it a market notoriety that, without iAds, may have taken several years to develop.