Differences between Apple and Google
In
the mobile ad arena, Apple and Google appear to be on par with each other.
Between them, they own the world's two largest mobile ad networks: Quattro
Wireless and AdMob. Additionally, both sell ads directly to advertisers.
The
main difference between the two is that while Apple just entered the
advertising business, Google is already a dominant player in the online ad
space. Google, however, is yet to transfer its online ad competencies to the
mobile ad space. Additionally, Apple is primarily a device manufacturer, with
82.3% of its revenue coming from devices, of which 54.2% are contributed by
iPhone and iPod alone. Google is primarily an advertising company, deriving
96.2% of its income comes from ads, which demonstrates that its core competency
is advertising while Apple’s remains manufacturing.
Furthermore,
while Apple is leveraging its apps to attract mobile advertisers, Google is not
interested in selling Android, leaving it entirely to the individual vendor’s
decision about which OS platform they choose to carry its ads.
Apple
and Google are focusing on two different segments of the mobile ad market.
Google is focused on performance advertising, in which advertisers buy ads
through auction, and pay prices on a cost per click (CPC) or other direct response
basis. Apple, on the other hand, is focused on the more challenging and
potentially more lucrative segment of brand advertising. In brand advertising,
the company is paid on a CPM basis as the goal is to put the advertisement in
front of the user, not necessarily generate a click.
The
critical difference between these two advertising segments is that while
advertisers on the iAd platform pay substantially higher prices – between
$75,000 and $300,000 for a few months – to reach the exclusive iPhone and iPad
audience, Google’s advertisers only pay a few pennies on a CPC basis to reach a
more general public. However, Google benefits through higher sales volumes.
