Apple’s iAd strategy still sounds rotten

WSJ’s Emily Steel reported last week that Apple wants to charge launch advertisers on its iAd network $10 million apiece.

While some are still drooling over Apple’s prowess, I remain skeptical. Only the very biggest players will belly up to the table and risk a toss of $10 million dice. This is a great way to ensure there’s no early innovation on the iAd platform. (Contrast APPL’s strategy with Google’s for adwords, in which anyone with $5 can start experimenting and any ad agency with a spare hour can start explaining the product to its customers.)

The $10 million entry fee is another symptom of Apple’s fundamental misunderstanding of what makes the online ad market so dynamic and innovative. As I argued last month, unlike Apple’s hardware and software products, which are born of meticulous planning and rigid control of Apple’s vertically integrated design, manufacturing and marketing machine, online advertising innovation relies on lots of competitive players making daily incremental adjustments to each other’s moves, jiving and juking to create new products and metrics.