Apple Continues to Shave iAd Buy-In Fees Amid Increasing Competition

Bloomberg reports that Apple has continued to reduce the buy-in fee for its iAd mobile advertising service, dropping package prices for mainstream advertisers from the original $1 million commitment down to just $300,000 in some cases.

Apple Inc.'s iAd mobile-advertising business has cut rates by as much as 70 percent as some marquee clients are using rival services, two people with knowledge of the matter said, signaling the company is struggling to parlay its technology leadership into success in the ad industry.

When Apple rolled out iAd a year ago, companies such as Citigroup Inc. and J.C. Penney Co. were being charged $1 million or more to run ad campaigns. Today those brands aren't using iAd, and Apple is offering packages for as little as $300,000, said the people, who asked not to be named because the rates are private.

Just a few months ago, Apple was reported to have cut the buy-in fee down to $500,000, but even that level has apparently not been enough to keep existing advertisers on board and bring on new ones to meet the ever-growing number of ad slots available. The new $300,000 rate is said to be being offered to companies willing to package together multiple campaigns for iAd.

iad engaged audience
For its part, Apple touts the over 100 campaigns already pushed through on iAd and notes that 20 companies have used the service over the past month with another 50 set to debut in the coming months. But still, app developers are only reporting fill rates in the range of 5-15%, limiting the potential income available through the iAd program.

According to the Bloomberg report, advertisers are turning to Google's AdMob, Millennial Media, and Greystripe as cross-platform advertising services competing against the iOS-only iAd. With the growing strength of Android, high buy-in fees for iAd, and developer dissatisfaction with iAd's performance, advertisers are increasingly interested in addressing multiple platforms, a key feature not available with iAd.

Apple is not standing still, having recently hired a prominent former advertising agency executive to help draw in brands to the iAd program and last December debuted its iAd Producer software to make it easy for advertisers to design their ads. But it remains to see whether these moves along with iAd's Apple prestige and sleek appearance can overcome the limitations inherent in the program.

Top Rated Comments

Popeye206 Avatar
165 months ago
I'm still wondering why anyone cares about iAd. The premise of making an intrusive ad "cool" is something only the Kool-Aid drinkers buy into.

Not sure what you mean by the Kool-Aid???

Advertising is not a bad thing - annoying at times, but not bad. It subsidizes our content. I don't want ads in Apps I pay for, but it's not a bad way for free Apps to make some money for their efforts. Everyone needs to get paid somehow or we won't have any Apps.

Look at Google.... their whole system is based on Advertising revenue. There's a lot of money to be made out there for everyone if they can get this figured out to what makes sense.
Score: 4 Votes (Like | Disagree)
TimUSCA Avatar
165 months ago
I'm still wondering why anyone cares about iAd. The premise of making an intrusive ad "cool" is something only the Kool-Aid drinkers buy into.

As a marketing professional, I can tell you that more than just Kool-Aid drinkers enjoy well-designed ads.

Here's the deal... as a consumer, we're all forced to see ads anyway. So advertisers want their ads to stick out more than the competition. The only way to do that is to make exceptional ads that keep the user engaged and entertained. Otherwise, the user just ignores the ad like anything else that gets in the way. And the beauty of iAds is that they're just as unobtrusive as any other mobile ad - it's only more engaging when the user taps on the bar.

I'm not the typical user since I'm in advertising and marketing... I click iAds just to see them because I appreciate what they're trying to do. But I think plenty of "normal" users (read: non-koolaid drinkers) do the same because iAds are almost like mini apps that are entertaining. I've found activities, coupons, etc in iAds. Plus, users know that an iAd will not take them away from their app. That's one of the biggest reasons most people don't click on mobile ads.

In any case... I think you're wrong when you say only Kool-Aid drinkers click on iAds. Only Kool-Aid drinkers DO, however, download the iAd showcase app. That just seems weird to me.
Score: 4 Votes (Like | Disagree)
winston1236 Avatar
165 months ago
Is it just me or every time the feed updates with another story, do you hold your breathe and hope it is the Lion release notice?

Maybe there should be no Apple news until this happens.
:apple:
I'm ashamed...but yes :)
Score: 3 Votes (Like | Disagree)
a.gomez Avatar
165 months ago
it would have been hard for Apple to convince any decent ad/design agency that they needed iAd to make a compelling campaign for mobile - fact that it is not cross-platform is just another nail.
Score: 1 Votes (Like | Disagree)
JuicyGoo Avatar
165 months ago
As someone who's actually worked on an iAd, I can say that it left a lot to be desired.

Apple wanted full control of the programming and thus fought us against any creative that strayed beyond their pre-made animation/navigation templates.

The end result was very choppy animation and very slow loading times.

Not sure what the end financial measurables were for the client, but I can see why ad/design agencies are losing interest in creating iAds.
Score: 1 Votes (Like | Disagree)
tljff9 Avatar
165 months ago
iAds have dropped tremendously over the last year. Last year this time I was making $10+ eCPM on iAds and today I am making $2.50. It seems like all I see any more are developer ads and very few actual ad campaigns from large companies. It's a shame because it had so much promise.
Score: 1 Votes (Like | Disagree)

Popular Stories

Apple car wheel icon feature yellow

Apple Cancels Electric Car Project

Tuesday February 27, 2024 11:05 am PST by
Apple has canceled all plans to release an autonomous, electric vehicle, reports Bloomberg. Apple has been working on an Apple Car for more than a decade and invested millions of dollars into development before deciding it was not a viable project. Apple's Chief Operating Officer Jeff Williams today told approximately 2,000 employees working on the Apple Car that the project was canceled,...
iOS 18 Mock iPhone 16 Feature Gray

iOS 18 Rumored to Be Compatible With These iPhone Models

Tuesday February 27, 2024 6:31 am PST by
iOS 18 will be compatible with the iPhone XR, and thereby also the iPhone XS and iPhone XS Max models with the same A12 Bionic chip, according to a post on X today from a private account with a proven track record of sharing build numbers for upcoming iOS updates. The post was spotted by MacRumors contributor Aaron Perris, and it has since been deleted. However, this was likely because the...
iOS 17

iOS 17.4 Coming Soon With These New Features for Your iPhone

Monday February 26, 2024 6:08 am PST by
In a press release last month, Apple confirmed that iOS 17.4 will be released in March, and the update includes several new features and changes for the iPhone. Key new features in iOS 17.4 include major App Store changes in the EU, Apple Podcasts transcripts, and an iMessage security upgrade. The update also adds new emoji and includes preparations for the launch of next-generation CarPlay...
iPad Air 5

iPadOS 18 Rumored to Drop Support for These iPad Models

Tuesday February 27, 2024 6:55 am PST by
iPadOS 18 will drop support for iPad models equipped with the A10X Fusion chip, according to a post on X today from a private account with a proven track record of sharing build numbers for upcoming iOS and iPadOS updates. This means that iPadOS 18 would not be compatible with the first-generation 10.5-inch iPad Pro or the second-generation 12.9-inch iPad Pro models released in 2017. It...
applearcade

Game Developers Describe 'Smell of Death' Around Apple Arcade

Monday February 26, 2024 7:24 am PST by
Some game developers are dissatisfied with Apple Arcade amid concerns about the subscription service's future, a new report claims. Sources speaking to mobilegamer.biz described a "smell of death" around Apple's games subscription service and noted the difference between the company's investment in TV and music, and its interest in games. "At the very top of the company there needs to be a ...
Beyond iPhone 13 Better Blue Face ID Single Camera Hole

Six Reasons to Wait for Next Year's iPhone 17

Thursday February 22, 2024 4:20 am PST by
Apple's iPhone development roadmap runs several years into the future and the company is continually working with suppliers on several successive iPhone models concurrently, which is why we sometimes get rumored feature leaks so far ahead of launch. The iPhone 17 series is no different, and already we have some idea of what to expect from Apple's 2025 smartphone lineup. If you plan to skip...