Apple?s recently launched iTunes Radio is catching the eye of brands such as Macy?s and Pepsi, but based on the manufacturer?s history with mobile advertising, marketers should be wary of pouring substantial money into the music streaming service.

Although iTunes Radio is still new, the advertising opportunities on it mimic the same experiences that Pandora has already set a standard on. Whether Apple can find ways to use data and its baked-in scale to significantly mix up ad budgets is yet to be seen.

?Like the launch of iAds, Apple started off asking huge commitments from advertisers,? said Dave Martin, senior vice president of media at Ignited, El Segundo, CA.

?In general, this product won?t have a big impact on the overall mobile ad marketplace,? he said.

?More likely it will just steal share from the existing mobile music providers, and if they continue to require million dollar commitments, they?ll never be able to compete with Pandora for the mobile budgets of smaller and regional advertisers.?

Stream on mobile
When Apple debuted iOS 7 last week, one of the biggest selling points for marketers is that iTunes Radio is baked into the operating system, which gives brands scale for consumers who either upgrade to the new software or buy a new iPhone 5S or 5C phone.

Additionally, iTunes Radio ties in with iTunes to let consumers buy songs seamlessly while they listen to music and could also potentially used by marketers to trigger quick payments.

A handful of brands including Pepsi, Macy?s, Nissan, McDonald?s and Procter and Gamble are all launch partners of the new music streaming service.

However, the perks of being one of the initial brands involved with iTunes Radio comes with a $10 million price tag, according to reports.

Additionally, an initial ad campaign from Pepsi does not seem to be drastically different from what Pandora offers advertisers.

Pepsi is the only brand to roll out a branded channel at launch. When consumers open iTunes radio, a Pepsi-branded playlist is featured at the top of the page.

If a consumer chooses to play the branded playlist, a pre-roll video is served, which is similar to the ad experience that Pandora offers.

For example, Pepsi is using iTunes Radio as an extension of its campaign with Beyonce with a short video.

Although Pepsi does have a leg up on other brands as one of the first to test iTunes Radio, it is unclear how significantly different the brand?s investments here will be here compared to its other advertising initiatives.

?They have a much bigger content library, and a lot of people have spent a ton of hours into Pandora so they can do better personalization as well, so Pandora definitely had a head start in the online radio market and will win in mobile advertising right now,? said Vishal Sankhla, cofounder of Viralheat, San Mateo, CA.

Macy?s is another exclusive launch partner on iTunes Radio. The brand plans to highlight fall ? and holiday-themed campaigns via iAds within iTunes Radio.

?I expect iRadio to be much like Apple products,? said Ed Chater, New York-based vice president of media operations at Somo.

?There will be less range of ad options and instead a focus on executing a core premium product well.

?Pandora comes at things differently. They focus more on advertisers? needs and presenting a flexible solution that fits those needs.?

An unfit advertising ecosystem
Compared to Pandora, Apple is not built as much for advertising as it is for content consumption, evidenced by former CEO Steve Job?s distaste for advertising.

Apple?s highly-publicized iAds were also set to make a splash when they were launched in 2010, but the ad formats have struggled to take off with marketers because of how expensive they are.

Although iAd prices have dropped, the ad formats are still set at premium prices and are not used by brands as effectively as they could be.

What is different about the upfront media buys this time though is that marketers had to pony up big amounts of money before the service even launched.

Untapped opportunities
Despite some of the initial advertising interest, it is still unclear how the majority of advertising opportunities will exist on iTunes Radio.

However, if Apple is successful at migrating users to iOS 7, there are significant opportunities for the company to create tailored ad campaigns since the service can tap into a consumer?s iTunes account and stored music that is accessible on the devices.

Apple also has the ability to use other pieces of its operating system, such as Siri to create significantly different experiences that persuade consumers to use iTunes Radio instead of Pandora, Spotify or another music-streaming company.

?It may come down to how iTunes radio provides this content in the free streaming service, how relevant and how frequent the spots are,? said Chris Cobb, creative director at SapientNitro, Boston.

?Some complaints about brand marketing on these services have been around relevancy and disruption of content,? he said. ?In terms of ad budget allocation, it will provide a way for marketers to diversify their messaging, splitting amongst the current spend.?

Final Take
Lauren Johnson is associate reporter on Mobile Marketer, New York