WSJ: Apple's tight control of iAds frustrates advertisers

A new report alleges that Apple's fledgling mobile advertising service, iAd, is off to a "bumpy start," as advertisers experience delays due to Apple's creative involvement.

The Wall Street Journal reported on Sunday that advertisers have had difficulty adjusting to Apple's new advertising system. Part of the problem, those partners said, is that Apple maintains "tight control over the creative process."

"Part of the reason some marketers are experiencing delays in getting their iAds to market is that Apple has kept tight control on the creative aspects of ad-making, something advertisers aren't used to, according to several ad executives involved with creating iAds," the report said.

It continued: "That has made the creation of mobile ads laborious, taking about eight to 10 weeks from brainstorm to completion — longer than normal for most mobile ads, executives said. The building of the actual ad, handled by Apple, in some cases is taking two weeks longer than expected, one person added."

Part of the hiccups are said to be the newness of the program, as Apple and its partners attempt to iron out the kinks. The interactive iAds began to show up in software on iOS 4 compatible devices on July 1.

iAds provide richly interactive ad experiences inside developers' apps, providing them a 60 percent cut of the advertising revenue. The hope is the advertisements — noted by the iAd logo in the corner — will be more compelling to users, because they don't have to leave their app and launch a browser to view them.

Sam Altman, Chief executive of social networking app Loopt, told the Journal that he feels the start of Apple's iAd network has been "disappointingly slow." However, he believes it will eventually perform better in the long term.

The report also said that Apple designs the iAds in HTMl5, but it has not yet provided a developer kit to its advertising partners to help them understand the capabilities and limitations of the format. It also alleged that Apple does not tell agencies where the iAd will appear, forcing them to search for their ads rather than easily access them.

The largely negative account of the start of the iAd service is a stark contrast from a different report last week from the Los Angeles Times, which painted a much more rosy picture. Initial advertisers like Unilever and Nissan said that they have had great results with iAd, with the car maker saying that users are five times more likely to click an iAd than a traditional mobile advertisement.

Developers, too, have found success with the new iAd platform. Dictionary.com said the amount it charges for ad space in its mobile advertisement increased 177 percent since Apple launched iAds. In addition, CBS Mobile has seen up to $25 CPM (an advertising term that means cost per thousand) in its applications for CBS Sports, CNet and GameSpot.