Thursday, September 8, 2011 at 4:34 pm.

How Apple can fix iAd

If Apple is serious about its iAd business — and I believe it still is — and wants to be a great advertising partner for app developers, media companies, brands, and agencies, here’s what it needs to do:

  1. Understand that being truly successful in the advertising business will require more personality, transparency, wining-and-dining, openness, and flexibility than any of Apple’s other businesses permit. (In other words: Get over itself.)
  2. Hire a GM from the advertising world — someone well-liked, from an agency? — to show media buyers and brands that Apple is serious about working with them. Allow them to represent Apple publicly in the ad community, at conferences, in the press, etc.
  3. Spend a significant amount of time talking about iAd at the next Apple product event. Steve Jobs hasn’t talked about it in a long time. Make it very clear that things are changing.
  4. Give iAd salespeople some wiggle room on ad rates — minimum buys and CPMs — so they can actually sell more ads.
  5. Consider allowing others to use iAd technology — both its creative format and targeting capabilities — for ads that Apple doesn’t sell. This could start with a few big publishers that sell their own ads — perhaps the New York Times and ESPN — and could eventually be further opened up. Charge a small ad serving rate for those ads and help publishers fill the rest of their inventory with Apple-brokered iAds.

Remember, Apple has two goals for iAd:

  1. To help developers make more money from apps, especially free apps. This further enriches Apple’s app ecosystem, which makes iPhones, iPads, and iPod touches more attractive purchases — which is how Apple makes money.
  2. To build a huge ($1 billion+ per year) advertising business. It might not be insanely profitable, but it doesn’t need to be — Apple makes its profits by selling hardware. But it needs to be a very big ad business to be successful and to be worth Apple’s investment.

With Apple’s superb technology and taste — and its huge app ecosystem — I still think iAd can be very successful at bringing brand advertisers to mobile advertising. Now it’s a matter of Apple showing some humility and making a few changes to put iAd on a track to win.

Also: 10 new industries Apple could go into (but probably won’t)