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Apple to Charge Up to $1 Million for iAd Placements?

The Wall Street Journal reports that Apple is reportedly looking to charge up to $1 million to companies interested in participating in the company's forthcoming iAd mobile advertising platform. Those companies looking to be launch partners could be looking at sums of up to $10 million.

Apple is making waves on Madison Avenue with its price tag, which comes with initial demands for greater control over advertisers' marketing campaigns.

"It's a hefty sum," says Phuc Truong, managing director at Mobext, a mobile marketing business owned by Havas SA whose clients include Sears, Choice Hotels, Amtrak and Volvo. "What Apple is trying to do is certainly above and beyond what's been done in the past."

The rumored premium pricing agrees with previous comments made by ad agencies who have received pitches from Apple's iAd team, and confirms that Apple will be targeting major corporations for participation in the program rather than smaller entities frequently seen in mobile advertising in many apps on the iPhone today.

According to the report, Apple will be charging one cent per banner displayed and two dollars per interactive ad viewed.

Apple is planning to charge advertisers a penny each time a consumer sees a banner ad, ad executives say. When a user taps on the banner and the ad pops up, Apple will charge $2. Under large ad buys, such as the $1 million package, costs would rack up to reach $1 million with the various views and taps.

The report also notes that Apple itself will build the ads over the first few months in order to ensure proper functioning and aesthetics. But Apple does have plans to release a developer kit that will permit ad agencies to create their own ads down the road and submit them to Apple for approval.

While some ad directors have expressed reluctance at giving up control of ad creation during the initial stages, it hasn't stopped a reported landslide of interest from agencies, who have participated in numerous pitch sessions from Apple's iAd team around the country and have begun gearing up with ideas for their campaigns.