WIRED
Apple has invited the ad networks of the world to serve ads within apps on the iPhone, iPad and iPod Touch, with one crucial exception: Ad networks run by companies that make a mobile operating system or hardware are barred from gathering user data about how people interact with their ads.
That effectively blocks Microsoft, Nokia and other companies, but it is aimed squarely at locking out Google, which recently won clearance from the feds to buy AdMob, the leading provider of ads in apps.
Tracking is a crucial aspect to any form of digital advertising, which offers several advantages over “dumb” paper — how long someone views an ad, which parts they tap on, what they’re doing when they decide to view the ad, and so on. Without those metrics, advertisers won’t use an online ad system.
Like Apple, Google both owns a mobile ad network and develops a mobile operating system. As one would expect, Google’s AdMob is irate about its ad network being locked out from Apple devices, after having previously been allowed to place its ads within iPhone apps. Those ads were a bigger part of its business than ads in Android apps (see chart).
“This change is not in the best interests of users or developers,” wrote AdMob chief Omar Hamoui in a blog post on Wednesday. “In the history of technology and innovation, it’s clear that competition delivers the best outcome. Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress.”
That may be true, but Apple’s position isn’t as crazy as it might sound.
First, the company never said it would block all competing ad networks on iOS devices, as was reported by the WSJ. On April 14, in fact, Apple spokeswoman Trudy Miller told Wired.com that app developers were free to include ads from third-party ad networks. Apple barred those ad networks from collecting and sending “device data to a third party for processing or analysis,” which drew criticism — including from us — because mobile ad networks need to see how people are viewing or interacting with their ads in order to be as effective as Apple’s own iAd, set to launch July 1.
The new Apple policy Steve Jobs announced on Monday now allows ad networks with a legitimate reason to collect user data to do so, as noted by All Things Digital — unless they also make a mobile OS or mobile hardware:
This leaves Google out in the cold, and seems to strike a big blow against competition in the mobile ad space.
It also smacks of payback, because Google swooped in to buy AdMob when Apple was just about to purchase it.
But think about the alternative. If Apple allows Google to track user data within ads, Google can see how people interact with advertising elements within iOS apps. And it would be able to use that information to inform the process of building AdMob ads into its own Android platform.
The real problem here is the vertical integration between these influential mobile operating systems and the biggest mobile advertising networks (Apple’s purchase of Quattro Wireless and Google’s purchase of AdMob), both blessed by the FTC. Apple shouldn’t be able to wield its control over its operating system and app store to create an unfair advertising advantage, but neither should it be compelled to allow a competitor to gather valuable usage information from its products.
This controversy goes to the heart of the difference between Apple and Google. Apple wants to build a closed system where it can make sure everything from apps to advertising works the way Apple thinks it should, while Google wants to overtake Apple by pursuing a more open approach, licensing Android to a variety of hardware manufacturers, allowing all comers into the Android store and allowing mobile OS companies to run ad networks on each others’ devices.
Apple’s Quattro Wireless already advertises in Android apps, even as Apple bars Google from advertising in iPhone apps.
“Android is an open platform,” Google spokesman Rob Shilkin told Wired.com on Thursday. “Android developers can choose which ad network or ad company they use to make money, as we believe that competition and openness deliver the best outcome for developers, which in turn leads to the best apps for users.
“Apple, through Quattro Wireless, already serves ads to app developers on Android, and we have no plans to change that — in fact, we’d welcome improved Apple ad products on Android.”
Neither Apple nor Google is wrong here. Both are acting in their best interests using the strategies they see fit. But now that they’ve gotten what they wanted — their own ad networks — the stage is set for limited competition in the mobile ad market, which ultimately limits app developers’ options, and that eventually trickles down to harm consumer choice, as Google AdMob’s Hamoui rightly points out. But he shouldn’t be angry at Apple, when the root cause of this situation is the same FTC policy that allowed his company to be acquired by Google for $750 million.
On the other hand, perhaps there was a long-view wisdom at work in the FTC’s decision to allow these acquisitions. Mobile advertising is still in its early stages, and several alternatives exist that will have an easier time competing with Apple’s and Google’s mobile ad networks if those two can’t compete directly with each other.
That effectively blocks Microsoft, Nokia and other companies, but it is aimed squarely at locking out Google, which recently won clearance from the feds to buy AdMob, the leading provider of ads in apps.
Tracking is a crucial aspect to any form of digital advertising, which offers several advantages over “dumb” paper — how long someone views an ad, which parts they tap on, what they’re doing when they decide to view the ad, and so on. Without those metrics, advertisers won’t use an online ad system.
Like Apple, Google both owns a mobile ad network and develops a mobile operating system. As one would expect, Google’s AdMob is irate about its ad network being locked out from Apple devices, after having previously been allowed to place its ads within iPhone apps. Those ads were a bigger part of its business than ads in Android apps (see chart).
“This change is not in the best interests of users or developers,” wrote AdMob chief Omar Hamoui in a blog post on Wednesday. “In the history of technology and innovation, it’s clear that competition delivers the best outcome. Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress.”
That may be true, but Apple’s position isn’t as crazy as it might sound.
First, the company never said it would block all competing ad networks on iOS devices, as was reported by the WSJ. On April 14, in fact, Apple spokeswoman Trudy Miller told Wired.com that app developers were free to include ads from third-party ad networks. Apple barred those ad networks from collecting and sending “device data to a third party for processing or analysis,” which drew criticism — including from us — because mobile ad networks need to see how people are viewing or interacting with their ads in order to be as effective as Apple’s own iAd, set to launch July 1.
The new Apple policy Steve Jobs announced on Monday now allows ad networks with a legitimate reason to collect user data to do so, as noted by All Things Digital — unless they also make a mobile OS or mobile hardware:
3.3.9 You and Your Applications may not collect, use, or disclose to any third party, user or device data without prior user consent, and then only under the following conditions:
The collection, use or disclosure is necessary in order to provide a service or function that is directly relevant to the use of the Application. For example, without Apple’s prior written consent, You may not use third party analytics software in Your Application to collect and send device data to a third party for aggregation, processing, or analysis.
The collection, use or disclosure is for the purpose of serving advertising to Your Application; is provided to an independent advertising service provider whose primary business is serving mobile ads (for example, an advertising service provider owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple would not qualify as independent); and the disclosure is limited to UDID, user location data, and other data specifically designated by Apple as available for advertising purposes.
This leaves Google out in the cold, and seems to strike a big blow against competition in the mobile ad space.
It also smacks of payback, because Google swooped in to buy AdMob when Apple was just about to purchase it.
But think about the alternative. If Apple allows Google to track user data within ads, Google can see how people interact with advertising elements within iOS apps. And it would be able to use that information to inform the process of building AdMob ads into its own Android platform.
The real problem here is the vertical integration between these influential mobile operating systems and the biggest mobile advertising networks (Apple’s purchase of Quattro Wireless and Google’s purchase of AdMob), both blessed by the FTC. Apple shouldn’t be able to wield its control over its operating system and app store to create an unfair advertising advantage, but neither should it be compelled to allow a competitor to gather valuable usage information from its products.
This controversy goes to the heart of the difference between Apple and Google. Apple wants to build a closed system where it can make sure everything from apps to advertising works the way Apple thinks it should, while Google wants to overtake Apple by pursuing a more open approach, licensing Android to a variety of hardware manufacturers, allowing all comers into the Android store and allowing mobile OS companies to run ad networks on each others’ devices.
Apple’s Quattro Wireless already advertises in Android apps, even as Apple bars Google from advertising in iPhone apps.
“Android is an open platform,” Google spokesman Rob Shilkin told Wired.com on Thursday. “Android developers can choose which ad network or ad company they use to make money, as we believe that competition and openness deliver the best outcome for developers, which in turn leads to the best apps for users.
“Apple, through Quattro Wireless, already serves ads to app developers on Android, and we have no plans to change that — in fact, we’d welcome improved Apple ad products on Android.”
Neither Apple nor Google is wrong here. Both are acting in their best interests using the strategies they see fit. But now that they’ve gotten what they wanted — their own ad networks — the stage is set for limited competition in the mobile ad market, which ultimately limits app developers’ options, and that eventually trickles down to harm consumer choice, as Google AdMob’s Hamoui rightly points out. But he shouldn’t be angry at Apple, when the root cause of this situation is the same FTC policy that allowed his company to be acquired by Google for $750 million.
On the other hand, perhaps there was a long-view wisdom at work in the FTC’s decision to allow these acquisitions. Mobile advertising is still in its early stages, and several alternatives exist that will have an easier time competing with Apple’s and Google’s mobile ad networks if those two can’t compete directly with each other.
