Apple Significantly Drops the Entry Fee For iAds

| iObserver

Apple has significantly cut the minimum amount for an advertising campaign in its mobile iAd system to US$100,000. It was previously $500,000, an amount that was cut in half from the original cool $1 million needed to get into the game in 2010, when iAd was first unveiled.

Advertising Age reported the news, which included two other changes: a 70 percent cut of ad revenues for developers, up from 60 percent to compensate for lower ad rates, and the elimination of an additional fee each time a user taps an ad. Apple will now only charge a fixed rate per 1,000 ad impressions.

The changes come as Apple has seen its standing slide in the mobile advertising space. Google has the lead in that area, with a 24 percent share in 2011, up from 10 percent the year before, while Millennial Media held the number two spot at 17 percent and Apple came in third at 15 percent. Apple’s share was 19 percent in 2010.

Advertising Age noted that there are more than 300 million devices out there running iOS, with over half a million apps available, but Google has hit the 250 million device mark and has more smartphones activated in the US than Apple.

Sign Up for the Newsletter

Join the TMO Express Daily Newsletter to get the latest Mac headlines in your e-mail every weekday.

4 Comments

Garion

In hindsight Apple should never have entered the add business.

It’s just not in Apple’s DNA to play Ad agency for other companies. And the iAds fiasco makes that painfully clear.

Apple will never beat Google at its own game.  You need to think different, Apple.

RonMacGuy

In hindsight Apple should never have entered the add business.

Give me a break.  Really?  Should never have entered because they will never beat Google at its own game?  Really?  They have to beat the big boy on the block or it’s not worth entering?  What a great business sense.

Let’s see, Apple is making great revenue and profit with iAd.  In 2010 Apple’s share was 19% vs. Google’s at 10% (hmm, looks like they WERE beating Google at its own game in 2010). So Apple’s share slides and it’s all doom and gloom?  Apple needs to think differently?  Hilarious stuff.

Substance

In hindsight Apple should never have entered the add business…
Apple will never beat Google at its own game.  You need to think different, Apple.

Really @Garion?  You can argue whether Apple should have entred the ad business - I feel it was more of a defensive move against Google than anything.  But to say that Apple shouldn’t have entered just because they aren’t beating Google is laughable. 

19% of mobile ad share in 2010 and 15% in 2011 is nothing to sneeze at and considering the rates that Apple was charging (another debatable topic), they probably made a good chunk of coin out of that market share.  It isn’t just about being #1, it’s about remaining profitable.  Hey, isn’t that exactly why the Mac is still around but Compaq, Packard-Bell, Gateway, etc. are not?

Finally, to suggest that Apple needs to Think Different about mobile ads doesn’t speak well to your knowledge of the subject.  iAd is a complete rethink of not just mobile advertising but Web advertising as well.  And it does its job exceedingly well IMO.

Terrin

Garion:

I disagree that Apple should have never entered. Instead, Apple’s problem was execution. First, it should have took the same approach it has taken with its other products. It should have offered a better product at a lower cost. As far as ads go, the product is good. The cost, which companies care a lot about, was high. Apple is selling a lot of music and songs because it offered a good product at a reasonable price. This is the same reason iPads and Macbook Airs are flying off shelves.

Second, Apple should have either excluded Google ads on Apple’s mobile platforms based on Google using information gained from Apple devices to spread Android (which Apple thinks violates its IP), or Apple should have made iAds cross platform to take the hurt to Google. It is probably too late to pursue option one, but not option two.

Google makes 3/4 of its ad revenue from Apple mobile products.  Apple needs to attack that. iAds is not really for Apple customers (nor I would argue is it for Apple to make money directly from). It is an incentive for Apple developers. These developers are going to develop for Android. Apple should accept that. Meanwhile, Apple might as well give its customers better ads, make its developers happier, and make some money on the Android platform. If iAds was cross platform, it could target certain Apple sponsored ads to Android users and perhaps eventually Microsoft Windows phone as well.

If I were Apple, I would have made iAds a wholly owned subsidiary like File Maker. Not to late for that either.

Log-in to comment