Apple to Shut Down Quattro Wireless Ad Network; Quattro Team Working to get iAd Platform Up to Speed

8/20/10Follow @wroush

Waltham, MA-based Quattro Wireless, which was acquired by Apple in January, is shutting down its three-year-old mobile advertising network in order to focus exclusively on suppporting Apple’s new iAd platform for distributing rich-media ads to iPhone and iPod touch users.

Quattro announced the shutdown today on its website and in a memo to advertisers and developers. “We believe iAd is the best mobile ad network in the world, and starting next month we’re going to focus all of our resources on the iAd advertising platform,” the announcement said. “We are no longer accepting new campaigns for the Quattro Wireless Network, and we will soon begin winding down existing campaigns. As of September 30, we will support ads exclusively for the iAd Network.”

The shutdown, which is being widely reported in the technology media today, is by no means a surprise. The original specialty of the house at Quattro, which was founded by alumni of Boston-based mobile marketing company M-Qube, was helping big-name brands such as the Univision TV network create mobile-friendly versions of their websites. Eventually Quattro began brokering advertisements for these sites, and created an exchange where advertisers could bid for placement. Quattro’s sites and ads appeared on all mobile browsers, and it’s obvious why Apple would want to get out of the business of brokering ads that might appear on Android, BlackBerry, or Palm devices.

Apple’s iAd network, announced in April as one of the features of the 4.0 version of the iPhone operating system, is designed to allow application developers to insert interactive, HTML5-based ads into apps for the iPhone and iPod touch. Apple assembles the ads from content supplied by advertisers and collects 40 percent of the revenues, passing the other 60 percent to app developers. According to an August 16 article in the Wall Street Journal, some advertisers’ iAd campaigns have been delayed due to production difficulties and Apple’s tight control over ad-making. Since the July 1 launch of the iAd platform, only four of the 17 announced launch partners (Unilever, Citigroup, Walt Disney, and J.C. Penney) have seen their ads appear in mobile apps, according to the Journal article.

iAd advertisements are designed to get iPhone and iPod touch users to spend far more time engaging with the ads than they do with typical banner ads on mobile websites. “iAds are captivating viewers with high-quality video and rich media experiences, engaging customers like never before and already delivering dramatic results,” said Andy Miller, the former Quattro CEO who’s now vice president of Apple’s iAd division, in today’s memo to advertisers. “Advertisers are seeing a huge spike in the amount of time customers spend watching and interacting with ads, making them more comparable to television advertising than traditional online ads, and developers are thrilled with this new source of revenue.” Despite the former Quattro team’s expertise in mobile Web development and its experience working with premium brands, it wouldn’t be surprising if the iAd staffers were still busy getting the kinks out of the system, given the ambitious, multimedia nature of the ads and Apple’s penchant for creative control.

Before being scooped up by Apple—a move that many observers saw as the Cupertino, CA-based giant’s answer to Google’s acquisition of mobile advertising network AdMob—Quattro had raised about $28 million in venture backing from Highland Capital Partners of Lexington, MA, and Globespan Capital Partners of Boston. Quattro’s purchase price wasn’t disclosed, but in a January story, Kara Swisher of the Wall Street Journal‘s AllThingsD blog said her sources pegged the deal at $275 million.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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