Apple's 'iAd for Developers' May Not Be Cost-Effective

Late last month, Apple enhanced its iAd mobile advertising platform to allow app developers to purchase ad space for simple banners that expand to display "in-app" App Store pages that allow users to read about and purchase applications without leaving the app they are currently in. Billed at $0.25 per click as opposed to the per-impression and $2-per-click fees for traditional advertisers using interactive ads, iAd for Developers appeared to offer a way for small developers to make use of the company's platform.

Anecdotal evidence from developer David Smith of Cross Forward Consulting (via Silicon Alley Insider) suggests, however, that the program may not be cost-effective for developers, as a test ad campaign resulted in low click-through and conversion rates for an app priced at only $0.99.

From August 19 through August 25 I ran a campaign on the newly released iAd for Developers platform for our Audiobooks Premium app. The results were, to say the least, disappointing. For all the promise of selling your apps directly within an advertisement, it appears that so far this is not a viable way to drive traffic and create an economically sustainable promotion. For $1,251.75, my campaign generated a total of 84 downloads, thus a Cost Per Acquisition (CPA) of ~$15. For a $0.99 app, those economics just can't work out.

The remainder of the post details the process of signing up for an monitoring the iAd for Developers, and while Smith was pleased with the professionalism of Apple's iAd staff and the ease with which he could monitor his campaign, the return on investment was simply nowhere near what would be required to be viable. While an application carrying a higher price tag or significant in-app purchasing content might stand a better chance of seeing a profitable ad campaign, conversion rates would likely be even lower for a more expensive application.

Given that the cost for the campaign is entirely based on clicks, we designed our banner to try and provide the audience with all the basic information they need to understand what Audiobooks is and whether they might be interested in purchasing it. This lead to a more textual treatment than a graphical one. Since we don't pay for impressions we only wanted truly interested people clicking on the advertisement.

105837 audiobooks premium banner ad
Smith's banner ad for Audiobooks Premium

Apple's iAd program utilizes a "targeting system" that helps identify which users might be most likely to respond to and purchase a given application, and for that reason, Apple's staff encouraged Smith to continue the campaign beyond the first few unsuccessful days in hopes of refining that targeting and boosting yields. Improvement was non-existent, however, and the campaign was canceled after six days and only 84 downloads on over 2 million impressions.

105837 audiobooks premium iad performance

Smith also performed a comparison campaign using the same banner ad on AdMob's network, finding a click-through rate over five times higher than that for iAd, and with AdMob's cheaper cost structure, Smith's cost-per-click was over six times cheaper on AdMob than on iAd. The reason for the significant difference in click-through rates between the platforms is unclear, especially considering the widely-held belief that the iAd program would offer a "premium" branding that would be more enticing to users than traditional banner ads.

Popular Stories

iCloud General Feature Redux

iPhone Users Who Pay for iCloud Storage Receive an All-New Perk

Thursday February 6, 2025 11:21 am PST by
If you pay for iCloud storage on your iPhone, Apple has a new perk for you, at no additional cost. iCloud+ is the official name for Apple's paid iCloud storage plans, which range from 50GB for $0.99 per month to 12TB for $59.99 per month in the United States. iCloud+ plans already come with multiple perks for free, such as Hide My Email and HomeKit Secure Video, and now there is another one...
iOS 18

iOS 18.4 Will Include These New Features for Your iPhone

Wednesday February 5, 2025 7:15 am PST by
iOS 18.3 was released last month, so the first iOS 18.4 beta should be coming soon. iOS 18.4 is expected to be a more substantial update for the iPhone, with several new features and changes related to Apple Intelligence and beyond. Apple's website suggests that iOS 18.4 will be released in April, following beta testing. Below, we outline what to expect from the update so far. Apple...
iPhone SE 4 Single Camera Thumb

iPhone SE 4 Launching as Soon as Next Week

Thursday February 6, 2025 3:30 pm PST by
Apple's next-generation iPhone SE could debut as soon as next week with a launch to follow later in February, reports Bloomberg's Mark Gurman. Apple isn't expected to hold an event for the iPhone SE 4, and will instead unveil the device through a press release. The iPhone SE 4 is expected to have an iPhone 14-style design, with Apple eliminating the thick bezels and Touch ID Home button of...
2007 iPhone

Apple Discontinuing This 18-Year-Old iPhone Feature

Saturday February 8, 2025 3:51 pm PST by
The end of an 18-year era is on the horizon for the iPhone. Apple reportedly plans to announce a new iPhone SE as soon as next week, and the device is expected to feature a full-screen design with Face ID, instead of a Touch ID home button. That means Apple will no longer sell any new iPhone models with a home button, for the first time since the original iPhone launched. The home button...
iCloud General Feature Redux

Apple Ordered by UK to Create Global iCloud Encryption Backdoor

Friday February 7, 2025 2:37 am PST by
The British government has secretly demanded that Apple give it blanket access to all encrypted user content uploaded to the cloud, reports The Washington Post. The undisclosed order is said to have been issued last month, and requires that Apple creates a back door that allows UK security officials unencumbered access to encrypted user data worldwide – an unprecedented demand not before...
iOS 18

iOS 18.3.1 Update Coming Soon for iPhones

Thursday February 6, 2025 7:31 am PST by
Apple is internally testing iOS 18.3.1 for iPhones, according to our website's analytics logs, which have been a consistently reliable indicator of upcoming iOS versions. The software update should be released within the next few weeks. iOS 18.3.1 should be a minor update that addresses software bugs and/or security vulnerabilities. Apple Intelligence notification summaries for news and...
Apple Leak Feature

Apple Leaker Issues Apology: 'Profound and Expensive Mistake'

Friday February 7, 2025 9:21 am PST by
Last year, we reported that Apple sued its former software engineer Andrew Aude for providing journalists with confidential information about the company's future plans, including details about the Journal app, Vision Pro headset, and more. As reported by 9to5Mac, the Superior Court of Santa Clara County on Thursday dismissed the lawsuit after Apple and Aude reached an agreement to resolve...
imac video apple feature

Apple to Announce New Products Next Week

Saturday February 8, 2025 10:55 am PST by
Apple has yet to release any new devices in 2025, but at least two new products are expected to be announced next week, according to rumors. Below, we outline the new Apple products that are likely to be unveiled next week. iPhone SE 4 Apple plans to announce the long-rumored iPhone SE 4 as soon as next week, according to Bloomberg's Mark Gurman. The new iPhone SE is rumored to...