Apple reportedly refocusing iAd network to support upcoming streaming radio service

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Issue Date: 
Jun 4 2013 - 12:10pm

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In anticipation of its Internet radio service, Apple is recrafting its iAd mobile advertising service in a way that will sell and deliver ads more reminiscent of Pandora, and even broadcast radio.

Apple is now reportedly courting major advertising companies and big-name brands to the iAd platform, and has mobilized both engineering and sales staffs in this effort.

The iAd platform is an ad network that can deliver ads to apps run on Apple mobile devices. Ads can be targeted to consumers based on other apps, music, movies, and books they've downloaded.

Businessweek explains that the iAd unit was initally created to run ads from third-party developers to encourage sales of the software they create and sell in Apple's App Store. Apple cofounder, the late Steve Jobs, "bought mobile-ad network Quattro Wireless to start an advertising platform in 2010," writes Businessweek. He "wanted the service to help developers make money so they would remain committed to making software for Apple’s products... The service was intended to make money for developers -- not Apple."

One obstacle Apple needs to overcome to convince big markets is iAd's lack of fine control over which apps will run their ads. What's more, advertising on it can cost more than rival services, and campaigns are limited to apps on Apple mobile devices.

To counter this, Apple has reportedly reduced its number of different charges and cut rates. They're also allowing agencies to use purchased inventory for more than one client, and have begun to accept ads for alcoholic beverages.

Part of Apple's licensing terms with labels, sources say, is an advertising revenue share. Though the company is hoping to announce the service at its developers conference next week, the iRadio service won't be publicly available to consumers until later this year, sources say, when Apple releases its iOS 7 mobile operating system.

Read more in BloombergBusinessweek here.

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