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Apple's iAd program facing stiff competition on ad fees

post #1 of 16
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Apple is reportedly being forced to dramatically lower its pricing for iAd campaigns by as much as 70 percent as rival ad networks seek to woo the company's high profile clients.

A report by Bloomberg cited unnamed sources as saying Apple had "cut rates by as much as 70 percent" off the original million dollar threshold for iAd advertisers when the program first launched last year.

The report noted that two original iAd clients, JC Penney and Citigroup, were no longer paying Apple a million dollars for new campaigns, and that Apple itself has reportedly started to offer new iAd packages for as little as $300,000. The report did note that both companies said they "may use iAd in the future."

Apple began iAd as a new way for iOS developers to monetize their apps, using interactive ads that were presented within the app via an integrated HTML5 environment, rather than pushing users out of the current app and redirecting them to an external web browser.

As part of its launch, Apple lined up high profile advertisers and built a series of campaigns with a minimum budget of a million dollars each.

In February however, the company halved its minimum campaign size to $500,000 to attract smaller advertisers, making the new reported offering of $300,000 iAd buys a logical progression for the company's expanding ad network plans.

The report noted that "Apple has cut the minimum ad purchase from $1 million to $500,000, and its offering agencies deals for as low as $300,000 if they bring together multiple campaigns."

Apple itself noted that iAd has attracted more than 100 launch campaigns from advertisers in seven countries, recently signing on Disney, AT&T, and Geico insurance. The company said 50 new campaigns will launch in the next few months.

Apple's iAd only serves ads to the company's own iOS devices, allowing rival ad networks to offer advertisers a wider demographic of viewers that includes Android, WebOS and Windows Phone 7 devices. Other advertisers, including Google's AdMob, Millennial Media, Greystripe and Mobclix, are touting both multi-platform support and lower fees for advertisers.

The iAd program has also been a thorn in the side for online marketers and ad departments, who complain that Apple exerts too much control over user data and ad design approvals.

At the same time, Rob Norman, chief executive of GroupM North America, noted that "Everyone likes the consumer experience it creates. Everyone wants to be there because they think that, possibly since television, this is one of the most elegant customer experiences." GroupM clients use iAd, including Unilever.
post #2 of 16
iAd is basically anathema to Apple's DNA. Even Apple's main customers don't like ads. It's a Microsoftian style distraction.
post #3 of 16
I like the fact that I don't have to leave the app to look at ads.
post #4 of 16
Quote:
Originally Posted by Shrike View Post

iAd is basically anathema to Apple's DNA. Even Apple's main customers don't like ads. It's a Microsoftian style distraction.

Not entirely. Apple pitched iAds as apps within apps that just so happened to be promoting a product. I thought the original concept for iAds was a unique and fun approach to advertising, but it seems that the high costs and competition could be hurting Apples effort to revamp the mobile ad industry.
post #5 of 16
Ads are complete crap. I can live with an ad if it's in a free game or in a limited version of an app, because nobody can really complain about something if it's free. But, if it's any app that I have paid money for, then I do not expect to see any ads at all. I don't even think that companies should advertise for their own games inside one of their games.

Ads are probably more suited for Android and other platforms where the user base, which consists of a lower class clientele, doesn't like to spend money for anything. They expect to get things for free and they are quite content with using an inferior, ad plagued version of an app. As long as these people can save a single dollar, then everything is gravy.
post #6 of 16
Quote:
Originally Posted by Apple ][ View Post

Ads are probably more suited for Android and other platforms where the user base, which consists of a lower class clientele

I like when people write crap like this to make a flame war.
post #7 of 16
Quote:
Originally Posted by blackbook View Post

Not entirely.

Pretty much entirely. Ad buyers want control over the context of the ad and they want access to user profiling to target it - Apple doesn't want to give them either. Ad buyers view end users as product, Apple views them as consumers.
post #8 of 16
Quote:
Originally Posted by blackbook View Post

Not entirely. Apple pitched iAds as apps within apps that just so happened to be promoting a product. I thought the original concept for iAds was a unique and fun approach to advertising, but it seems that the high costs and competition could be hurting Apples effort to revamp the mobile ad industry.

Revamp the mobile ad industry? iAd?

I saw it, at best, as a way for Apple to do what they usually try to do: take the premium end where most of the money is. Apple thought or is thinking that their design sensibilities with iAd will attract rich eyeballs and attract premium companies. Neat idea I suppose. But it is quite indirect.

To get rich eyeballs, I think they really have to control which applications can use iAds. If an iAd is in an a low brow app from some Joe Developer, it dilutes the brand. NYT and WSJ apps, yes. Fart apps, no.
post #9 of 16
Quote:
Originally Posted by Shrike View Post

To get rich eyeballs, I think they really have to control which applications can use iAds. If an iAd is in an a low brow app from some Joe Developer, it dilutes the brand. NYT and WSJ apps, yes. Fart apps, no.

Getting rich eyeballs wouldn't even be enough, you need audited eyeballs whos' exact demographics are accessible to media buyers - and Apple doesn't want to be in the business of supplying that.
post #10 of 16
Quote:
Originally Posted by Apple ][ View Post

Ads are probably more suited for Android and other platforms where the user base, which consists of a lower class clientele, doesn't like to spend money for anything.

Do you have some evidence that Apple buyers are just all-around better people? Lower-class clientele? Perhaps your Apple purchases help maintain your superiority complex. . .
melior diabolus quem scies
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melior diabolus quem scies
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post #11 of 16
Just when you thought Apple was different from the rest like Facebook,Google.
I know iAd has been there for a long time.But somehow it does not get as much limelight as any other Apple product.

Maybe its because it's not good enough(though personally I find it hard to believe) or maybe Apple themselves are not too enthusiastic to talk about it?I don't know.

Only time will tell whether Apple becomes another Google.Although as long as hardware and software sales are booming,I don't see them pushing iAd aggressively like Google.
post #12 of 16
...that none of those that have commented so far are making any money from iAd.

iAd is the sweetest ad platform for developers to make money. I pray nothing bad happens to iAd, instead I'm looking forward to it being expanded to many more countries.
post #13 of 16
I wonder what exactly you get for $300,000. Is that just the creative or is that placement as well?

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post #14 of 16
Quote:
Originally Posted by Apple ][ View Post

Ads are complete crap. I can live with an ad if it's in a free game or in a limited version of an app, because nobody can really complain about something if it's free.

Quote:
They expect to get things for free and they are quite content with using an inferior, ad plagued version of an app.

Because that isn't a contradiction at all.
post #15 of 16
Quote:
Originally Posted by mstone View Post

I wonder what exactly you get for $300,000. Is that just the creative or is that placement as well?

The quoted cost would be for the placement and NOT include creative.*

* Not fact, but in the opinion of Media & Advertising professional
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post #16 of 16
Quote:
Originally Posted by ameldrum1 View Post

The quoted cost would be for the placement and NOT include creative.*

* Not fact, but in the opinion of Media & Advertising professional

There is a lot I don't know about that side of the business since I'm in the technical and creative side. I'm like a mushroom when it comes to finance. (They keep me in the dark a feed me a lot of bull shit.) But is seems like the ads are click through based revenue for the developers, so, isn't it the same for the clients, sort of like Google ads?

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