Apple's iTunes Radio will debut in September with a number of brand partners including McDonald's, Nissan, Pepsi, and Procter & Gamble, reports AdAge. Under the terms of the deal, Apple's launch partners will get exclusive ads within their industries through the end of 2013.
The deals range from the high single-digit millions of dollars to tens of millions of dollars and include a 12 month advertising campaign to run within the streaming music service for each of the participating brands.
First introduced at WWDC, iTunes Radio is Apple’s upcoming Internet radio service that functions similarly to Pandora, offering up personalized radio stations based on artist or song selections.
iTunes Radio is free, but is supported with both interstitial audio and video ads along with standard mobile ads. iTunes Match subscribers, however, can enjoy an ad-free experience.
Advertisements on iTunes Radio will come in three forms: interstitial audio and video ads and "slate" ads; interactive display ads that will take over whatever screen the consumer is using. That includes iPhones, iPads, all desktops and laptops loaded with iTunes (including Windows PCs) and Apple TV, the Apple device that brings Internet connectivity and apps to TVs.
iTunes Radio listeners will hear one audio ad every 15 minutes and will see a video ad each hour. While initial ads will run on all devices, advertisers will later be able to target ads to specific devices. Launch partners will also have the opportunity to create sponsored stations that have fewer ads than standard radio stations.
According to reports, Apple's iAd staff is responsible for securing the advertising deals that support the streaming music service. iTunes Radio represents a new opportunity for iAd, which was originally envisioned as a way to help developers earn money on the iOS platform. iAd has been historically unsuccessful in terms of attracting both developer interest and revenue, but with the new audio ads, Apple will be able to keep 90% of the money it earns instead of shelling out a large portion to developers.
iTunes Radio is bundled into iOS 7 and will likely debut during Apple's September 10 iPhone event.
