• by Steve Smith , Staff Writer @popeyesm, June 10, 2010

Speculation about the impact of Apple's July launch of the iAd platform is all over the place this week. Much of it is being caused by a kind of peekaboo Apple is playing with its intentions. Even at this stage there are a lot of things about the iAd format and model that seem uncertain. After a lot of hand-wringing over whether Apple was going to allow any third-party ad metrics at all off its system, the revised SDK seemed to open things up a bit to the other ad nets. But the revision also locks out direct rivals like Google.

This was enough to bring AdMob's Omar Hamoui out swinging yesterday. He writes, "If enforced as written, [Apple] would prohibit app developers from using AdMob and Google's advertising solutions on the iPhone. The terms hurt both large and small developers by severely limiting their choice of how best to make money. And because advertising funds a huge number of free and low cost apps, these terms are bad for consumers as well." The new restrictions also attracted the notice of the Federal Trade Commission, according to the Financial Times, which noted that the Commission is looking into Apple's restrictions.

But Apple continues to play this game of peekaboo. When I talk to publishers, tech providers and ad networks, almost everyone is enthused by the long-term effect of having Apple validate brand advertising on mobile. All boats will rise, says Jumptap CMO Paran Johar at the news that Apple booked $60 million in iAd business already. "I think it's great that marketers are willing to spend big money on mobile," he tells me.

And the upshot for the other ad networks is that the rival brands will be looking for inventory and rich-media solutions elsewhere. "There are going to be a lot of competitors that will have to accelerate their efforts," says Johar. If some of the big brands that partnered with Apple have exclusivity agreements, then the competition will have to look for alternatives.

Frank Barbieri, chief product officer at video ad net Transpera, thinks it is good news for the brand cause. "The next wave is brand advertising, and Jobs has used the bully pulpit to announce its arrival in mobile." He thinks that trend ultimately helps video advertising, which is a tried and true branding vehicle.

No one seems too concerned about iAd's rich-media in-app format. Johar says "it's not as complicated as a lot of people make it seem.". Companies like Crisp Wireless, Greystripe and Medialets are already making similar units. Nevertheless, it is obvious that on some level Apple is competing with other ad networks and even with agencies as they develop creative and deal directly with the brands. But the line from the ad nets and tech providers with whom I spoke is that they will compete with Apple on reach and price. There are creative solutions that are comparable and will cost less as they reach into mobile Web, Android and Apple apps.

How traditional larger publishers fit into this iAd scheme is a lingering issue, however. A number of publishers have complained that on the face of it, they don't see the percentage in allowing Apple to sell their inventory, own the customer and the data, and pass on a rev share. Boris Fridman, Crisp Wireless' CEO, tells me, "I view iAd appealing to long-tail developers rather than to premium publishers. IAd is a viable competitor to the ad networks, particularly those that maintain a large presence in the long tail." As for the major media, why would they want in on this deal? "They are not about to pay Apple 40% for its tier-1 inventory," he says.

It's still unclear to me what kind of inventory this $60 million is buying for the early-in partners. What level of transparency and control do the brands have? Are they really paying premium prices for long-tail content?

It seems to me that Apple's dodge-and-weave approach to the mobile market still risks hitting a third rail that may be bigger than antitrust. The targeting and data collection capabilities of Apple's ad program are still a very big question mark. The company is sitting on a pile of iTunes-rendered user behaviors. What will they use and how? What targeting will be available to advertisers, and how will the company raise the issue with its own consumers?

Apple has kept everyone guessing about many of the particulars in its entry to the advertising game. So far this strategy seems to have worked to its advantage. On the media and advertising side, that mystique has unusual power. I have heard senior executives at major agencies and publishers preen like teen girls over having been invited in by "Steve" to partner on some of these recent launches. But how will consumers feel when the iconic brand that has been so cool for so long becomes just another source of ads?