Apple has cut its minimum iAd buy-in fee to $100,000 according to a report from Advertising Age. The new lower price, one-tenth the $1 million originally required when iAd launched in July of 2010, dropped to $500k and then $300k per package.
Even the $300k 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. In addition to the reduced minimum spend, Apple is increasing the cut that developers receive from iAds running within their apps from 60% to 70%. The extra money is expected to cover lower ad rates and encourage developers to include iAds within their applications.
AdAge continues:
Apple is also planning to change the way it charges for ads, which irked some advertisers and agencies. Since it launched in 2010, 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 only charge the cost-per-thousand rate.
Apple recently hired former Adobe executive Todd Teresi to head up the iAds service after Andy Miller departed to join a venture capital firm.
Top Rated Comments
I guess, Apple is still struggling with iAds, otherwise the price wouldn't be dropping, still.
I've been strongly considering dropping ads entirely from my ad supported apps and just charging for them... but if Apple wants to finally drop the requirement that people tap on the ads, that sounds great. Only about 1 in 1000 people would actually do that, and as a result, I essentially only made 10 cents per 1000 uses of my app. That amounted to anywhere between $1 and $5 per month. At thousands of downloads for free, I'm pretty certain if I changed to charging $1 per download I'd still get a few dozen downloads a month. Heck, just one dozen downloads a month would still be $8, over double what I get in an average month from ads.
If ad fill rates go up from the reduced buy in, that could double impressions (right now only about 50% of users see ads.) Increase my cut from 60% to 70% and that'll be a slight increase, too. Maybe change $0.10/thousand to $1/thousand... and this could be substantial. $1-$5 per month goes to $21-$110 per month... my ad supported apps would actually make me roughly as much money as my paid for apps.