Is Apple planning to launch an ad exchange, the way Facebook and Twitter have done?
That's the rumor.
We heard it from an executive who is one of the biggest players in online advertising.
We can't confirm it. And, of course, the ad business is awash with rumors. (And, to give the full context, a couple of other sources we talked to said they'd heard nothing of the kind.)
But ... it's interesting that a bunch of people in the mobile ad business expect, even want, Apple to launch one, perhaps inside iAd, its existing mobile ad network.
In theory, an ad exchange would work by allowing advertisers to target users as they enter the Apple eco-system on their iPads, MacBooks, various web sites and apps. The system would alert advertisers that an Apple user arrived. Any advertiser tracking that user with a cookie (a piece of software that records previous web sites you've looked at) could then bid to serve an ad targeting that user.
Apple CEO Tim Cook was even asked about it at the AllThingsD conference recently. He said that advertising was not a core business to Apple, but Apple wanted developers who makes Apps for Apple products to get revenue from them that would incentivize them to make more products:
“We got into mobile advertising because we want developers to make money…It wasn't about Apple making money.” Cook also noted Apple's mobile advertising business isn't "large enough to be core" to the company.
However, Apple did make a big move in mobile ad sales last year: It hired Todd Teresi, formerly vice president of Media Solutions at Adobe, to run iAd. Teresi is also a veteran of Yahoo, where he ran its third-party publisher ad network. He also did a spell at Quantcast, the audience measurement company.
If Apple wanted to start an ad exchange, they hired one of the best qualified guys to manage it, in other words.
And then there's Apple alumnus Dan Grigorovici, who is now CEO at AdMobius, a mobile advertising measurement company. He used to be at Quattro Wireless before it was acquired by Apple and turned into iAd. He thinks Apple would have a "tremendous" ad exchange on its hands, if only the company mustered the desire to actually build it. Here's what he told AdExchanger:
“Apple owns the device, the app ecosystem, the ad SDK, the transactional system (iTunes, etc.), multiple media channels (online, TV - albeit that's small today, smartphones, tablets), multiple content categories (music, movies, etc.),” Grigorovici commented. “From that standpoint, I had always believed that if Apple plans to evolve the ad business to be more important, they have probably the best opportunity for cross-channel advertising, and one of the best data assets out there.”
What is holding Apple back, Grigorovici noted, is “the [low] fill rate and the advertiser demand for cross-OS scalable solutions…[unless Apple becomes] more interested in collaborating with and mediating competing ad businesses in the ecosystem, in order to fulfill advertiser's needs. So there is a dilemma here: Apple’s closed ad ecosystem offers tremendous benefits and differentiation, but it fundamentally does not solve the scale problem.”
Lastly, Mark Grether, COO at Xaxis (an online ad buying firm), made this remarkable prediction for 2013:
In particular, both Twitter and Apple (tablet/mobile) could conceivably launch their own RTB exchanges to take advantage of the benefits they see occurring to Facebook – and advertisers – through the launch of FBX.
Twitter is on the cusp of launching an ad exchange, we noted yesterday. So the first half of his prediction has already come true.
