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

[jclardy]

I am guessing Apple is going to be very selective in the way the ads are placed in apps, (i.e. no buttons directly above them to try and make the user accidentally click on them.) $2 for an accidental click is really expensive. Although the 60% cut for developers is sounding really nice right now if these numbers are correct....$1.20 for someone to click on an ad in your app? Plus 0.6th a cent for each impression? That is insane compared to what AdMob is paying out. I just wonder if they will have enough ad inventory to serve to all the apps that implement it.

Unless the cost goes down you won't be seeing many iPhone developers apps showing up in iAd. With our apps costing only around $1-$2 paying $2 for an ad click is insane. Even The ~$0.30 per click for stuff like AdSense does not make much sense. This is obviously aimed at bringing in big brand names.

 

[Wurm5150]

So this pretty much leaves out all those (smaller) developers who were clapping when Steve introduced iAds... unless they can pony up a cool million. This seems to be targeting the larger, corporate "evil" companies. $2 bucks for a view? If I don't like a company, I'll keep on viewing their ads just to hit them with a loss.

No dude.. I don't think you understand how this joint works. DEVELOPERS GET PAID TO PLACE ADS ON THEIR APPS. THE BIG COMPANIES/AD AGENCIES ARE THE ONES WHO PAY "a cool million" as you said to APPLE TO ADVERTISE THEIR JOINT ON APPS AND APPLE GIVES A PIECE OF THE PIE TO THE DEVELOPERS FOR ALLOWING ADS ON THEIR APPS.

I'm sure developers would love the high cost for companies to advertise because it means they'll get paid more. This is actually good for "small" developers.

 

[LagunaSol]

Fixed that for you.

I was obviously talking about Google's business strategy with Android, not Google's business in general.

 

[ChazUK]

Google:

Makes money selling mobile devices. Source
Makes money selling apps on mobile devices. Source
Makes money selling accessories for mobile devices. Source 1, Source 2, Source 3
Makes money selling ads on mobile devices. Source
Makes money licencing its services to OEM manufacturers Source

Apple:

Makes money selling mobile devices.
Makes money selling apps on mobile devices.
Makes money selling media on mobile devices.
Makes money selling accessories for mobile devices.
Makes money selling ads on mobile devices.

Hmm, I wonder who has the better business plan here?

Erm.... Both seem good to me!

 

[charlituna]

Wow! Now, on our iphones and ipads, are we going to get inundated with ads? Of course......

not necessarily.

Apps are not required to have ads. Some just choose that over a flat fee off the top to buy the ad. Thing is that someone else is getting the cut of the funds, this way Apple gets the share. And they can argue that the ad coding is native etc.

Doesn't mean the ad counts will go up or that Apple will have them outside of the apps that choose to have ads

 

[theBB]

Google:

Makes money selling ads on mobile devices.

Apple:

Makes money selling mobile devices.
Makes money selling apps on mobile devices.
Makes money selling media on mobile devices.
Makes money selling accessories for mobile devices.
Makes money selling ads on mobile devices.

Hmm, I wonder who has the better business plan here?

Google spends money on developing Android

Apple spends money on developing iPhone OS
on designing, testing etc. smartphone hardware
on advertising for iPhone
on servers to sell media
on servers to sell apps

 

[Wurm5150]

No dude

So this pretty much leaves out all those (smaller) developers who were clapping when Steve introduced iAds... unless they can pony up a cool million. This seems to be targeting the larger, corporate "evil" companies. $2 bucks for a view? If I don't like a company, I'll keep on viewing their ads just to hit them with a loss.

No dude, I don't think you understand how this whole iAd joint rolls. DEVELOPERS GET PAID TO PLACE ADS ON THEIR APPS. THE BIG COMPANIES/AD AGENCIES ARE THE ONES WHO PAY "a cool million" as you say to APPLE TO ADVERTISE THEIR JOINT ON APPLS AND APPLE GIVES A PIECE OF THE PIE TO DEVELOPERS FOR PARTICIPATING ALLOWING ADS ON THEIR APPS.

I'm sure developers would love the high cost for companies to advertise because it means they'll get paid more. This is actually good news for "small" developers who give out free apps.

 

[robfromabove]

Seems like kind of a ballsy move by Apple. I'm sure there's a reason for it, however.

 

[theBB]

How do these prices compare to ads on popular news sites? Does anybody know? 1cent per view sounds reasonable, but $2 per click may be too expensive. However, I once heard about 50-cents per click on Google text ads, so maybe it is not all that different.

The bigger question is "targeting". Are they going to allow advertisers to pick a particular profile of users? (I would assume so.) What kind of characteristics will be included in these profiles?

 

[tdream]

I hope this dies on it's feet. Ads are never a good thing.

 

[paradox00]

How will the ads be more intrusive?

1) If you see just the banner, they are charging a penny, which is probably as much, as Google charges through Admob. We have seen what these banner ads look like.

2) It gets expensive if you tap on the ad. This would pressure on making the rolled out ad more intrusive, but how much more intrusive can you get than the whole screen itself? OTOH, opening this screen is absolutely optional, and closing it is easier still.

And don't forget that 60% of those $2 are going to the developers. i.e. Apple is only seeing about 80c, (although they have created the platform, and are spending the effort and money to court the advertisers).

The only intrusive part is the banner, which as you suggested wont become more intrusive. Once you click on the banner, the ad is no longer intrusive, but something you requested.

 

[Wurm5150]

For those b!tching about iAd... why? you're not the one who has to pony up a million bucks. It's not your money. If these big companies want to dole out that much for advertising let them. That's what they do to help get people to buy their stuff. They do everday and you see it everday whether its the Internet or television or newpaper or radio.

And for those b!tching about iAd putting ads on apps, ads already exists on iPhone apps. It makes no difference with or without iAd. The only difference will be that ads through iAds will be more attractive. I always ignore ad banners but, the if ads are enticing and interesting enough, I might just click on it, and maybe buy the product, who knows. Fact is ads have been around and will be around with or without iAd. If you don't like or not interested in a particulr ad, then don't click on it if you don't want it to distract whatever it is your doing inside an app.

 

[Cheffy Dave]

Is this sarcasm? I'm not really looking for high quality ads, I'm looking for less ads.

You scared Dave there for a second

 

[theBB]

The bigger question is "targeting". Are they going to allow advertisers to pick a particular profile of users? (I would assume so.) What kind of characteristics will be included in these profiles?

I should have read the article. It mentions:

- download preferences from its iTunes store (finance apps, horror movies etc.)
- general location such as city

It is not clear if the location means the location of the user at the time of the ad view or just billing address or both.

 

[ChazUK]

I hope this dies on it's feet. Ads are never a good thing.

Neither is depriving developers of income.

 

[Shorties]

Wow.... This is kinda crazy!!! $2 for each ad that is clicked on!!! Wow!!!

Yeah, but you have to remember that apple is the one developing the ads, and I assume, they will attempt to make them highly interactive, and try to set an example when they open up the iAd SDK. If Apple, charges $2 per click when the iAd SDK is released, that will be incredible, but I don't mind. (Though I would never be able to advertise my personal endeavors on the iAd network, if I ever actually get anything done...) The more you pay to have an ad, the more attention you will spend on making sure it is a high quality ad. Apple is turning the mobile market into another TV, and I think that is really cool.

 

[aeaglex07]

Cant wait till were at the point where our phone calls will be interrupted by advertisements.

*Please hold for a brief message from our sponsor*

 

[mrboult]

Surely the first advertisers on board are going to be punished very hard!

I mean when these new amazing interactive ads start popping up I'm gonna be clicking on ALL of them just to see them working (out of interest in the new advertising tech not the products themselves)

I won't be buying any Volvo cars or Nike trainers as a result. It's just gonna cost them $2 each time I look.

 

[Wolfie Scooter]

And now we see the REAL reason that Flash is not allowed on the iPhone/iPad - advertising revenue (and game revenue as well)! Steve Jobs can list all the reasons he wants, but this announcement hitting so close to the "Reasons we won't allow Flash" letter tells the true story.

Before you get all up in arms, I realize that as CEO, Jobs job is to make Apple money. And he's doing a great job of that. But the Apple PR spin is staring to hurt my head.

 

[bluedog3401]

A small developer is NOT paying a million dollars U.S. The developer is placing ads in their application that larger companies place with Apple. The developer gets paid for each click/view/purchase (I haven't looked at the specifics of the pricing agreements and portions to each)

I don't see the phone itself popping up ads, but this is a compelling 'greater revenue' for developers if it is appropriate for their application. I see it being MOST USED in the magazine/newspaper publishing and this may be the PRECISE thing Apple is targeting.

I can see free newspaper/magazine apps that include this type of ad. I can see myself being willing to use these apps to deliver news/media with the ads. I don't see a notetaking app popping up ads. If a developer makes a note app with this type of ad, I just wouldn't use it.

 

[chilidawgsoft]

What this means for developers

Using the numbers from this article and my own data, I did some quick math to spell out what this could mean for developers.

http://chilidawgsoftware.posterous.com/how-much-from-iads

 

[Rodimus Prime]

Apple will not block other ad companies (Google). Developers can use anyone they want for their ads. But they are going to use who pays the best.

Ok fine Apple crippled ads from other companies by saying they will be blocking any apps that send info back from the ads and with out that data being sent back the value of the ads drops like a rock because the critical part to companies is the data bases based on if people click the links, what ads are displayed and so on.

On apples ads that information is sent back and on others they are not. It is a huge crippling apple is doing.

 

[hagjohn]

I hate ads and I don't want them on my iPhone.

 

[jerome65]

Great, yet another development kit and environment to learn.

 

[Gakboi]

This might end up being the case -- Apple has had some patents recently related to technologies to interrupt device functioning to make sure ads are seen, etc.... .

This will probably lead to restricted and unrestricted devices going on sale. Pay little or nothing but put up with ads/interruptions. Pay full price and have less ads and no interruptions. Or with Steve Jobs in control it will probably be pay (today's) full price and put up with interruptions pay double and get loads of ads. pay triple .....