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Apple slashes iAd pricing to $100,000 as platform's mobile ad share wilts

Apple slashes iAd pricing to $100,000 as platform's mobile ad share wilts
There aren't many sectors within the mobile industry where Apple could be accurately described as a bit-part player, but advertising is fast becoming one.

After launching with the kind of fanfare the company has made its trademark, iAd – the result of Apple's $275 million purchase of Quattro Wireless – has faded away according to AdAge, resulting in a comprehensive revamp for the ad platform.

Well, that's how Apple will likely pitch it. In reality, however, the firm is removing the platform's main barrier to entry - price - to build up what has reportedly become a dearth of clients.

Cost cutting

The site reports advertisers will now have to spend as little as $100,000 to run an iAd campaign across iPhone and iPad apps – down considerably from the $1 million fee the platform launched with.

Apple is also upping the revenue share enjoyed by developers from 60 percent to 70 percent in a bid to spread the platform's base.

"The extra money will compensate for lower ad rates and serve as added incentive for developers to build businesses on Apple devices, even though they may grab a bigger audience or more ad revenue creating apps for Google's Android devices, which now outnumber Apple smartphones in the US," reports AdAge.

"Apple also plans to change the way it charges for ads, which irked some advertisers and agencies. Since iAd launched, Apple has charged advertisers twice: a fixed rate for every 1,000 ad impressions plus an additional fee every time a user clicked on the ad.

"Apple will now charge only the cost-per-thousand rate."

Paying the price

This isn't the first time Apple has attempted to rejuvenate iAd by cutting its prices.

Indeed, this will be the third time the company has lowered its rates, having first dropped prices to $500,000 in 2011 before cutting them again to $300,000.

Early hype ensured iAd started with the a strong base, with Apple holding on to 21 percent of the US mobile ad market according to IDC projections published in September 2010.

AdAge claims IDC figures suggest iAd now holds 15 percent of the market, falling behind both Google and Millennial Media on 24 percent and 17 percent respectively.

[source: AdAge]
Contributing Editor

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.

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