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

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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.
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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.jpg



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.

Article Link: Apple Continues to Shave iAd Buy-In Fees Amid Increasing Competition
 
Article Link
https://www.macrumors.com/2011/07/07/apple-continues-to-shave-iad-buy-in-fees-amid-increasing-competition/
If it ain't Lion.....

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:
 
miles01110 said:
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.
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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.
 
miles01110 said:
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.
Click to expand...

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.
 
TimUSCA said:
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....

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.
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I think if regular iPhone users are clicking on iAds for their entertainment value, then they really have too much time on their hands. I love entertainment like the next average Joe, but seeking it from within iAds is really a strange idea.

Myself, I find iAds relatively invisible. Like most ads. It is only a rare event when I notice and click on an ad. And when I do, it's for a product I have already "pre-identified" as a need/want, but certainly not for entertainment.
 
Let's see.

It took Google 2-3 years to figure out social. How long will it take Apple to figure out advertising?
 
Consultant said:
The price / benefit ratio just has to be better than Google adsense.



The iAds are like mini apps. They are quite entertaining if you are interested the product offered, unlike traditional ads.
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considering that the big players who got in early have left iAds tells us other wise.
Clearly they are not seeing the benefit of it for their money.

I think Apple just is getting slapped big time seeing that the same level of control they demand else were and price premium is not working in this area. Price per click may need to come down as well but that information we do not have on had as far as I know.

Apple in theory will figure things out in time and may be able to offer a really good competitive services.
 
What is Apple's goal?

We really do not know what the goal was for Apple.

Did they want to reinvent the ad industry? Be the mobile ad market leader? Entice iOS development by creating a new revenue source for developers? Those are all failed goals of the iAd program.

If they wanted to give an Apple centric tied in program for developers but not risk a lot of internal recoruces then Apple has accomplished its goal with iAd.

iAd seem smuch like AppleTV, a hobby. They are dabbling with this and are nto sure if it is a market with appropriately high margins for Apple to be in.

I see iAd as being too similar to the lower cost and cross platform alternatives. While iAds do allow more cohesion and interactivity than the competition, the high campaign costs, the low fill rates and development costs limit adoption and growth.

I doubt Apple wants to take on the industry and race to the bottom for prices and margins just to gain market share. Let Google pander to the lowest bidder and let Apple target the more refined campaign. But it does seem Apple has had some very rough patches with iAd.

Diverging slightly, not everything Apple does is gold. Ping and iAd are great examples of this. Both could have been gold for Apple with its user base and recognition. And while neither is worthy of being called a failure, neither is a success either. I do wonder if subsequent versions of iOS and iTunes will even feature Ping or iAds in the future.
 
It seems to me that Apple's downfall here is that horrible price.

Apple's entire idea here is that iAds are like mini-applications. They treat the ads the way they do apps, by only allowing them to run on Apple devices and only after Apple has approved of them.

Why not make it $99, the same cost as developing full applications.

Here's what would happen if they did:
1.) Everyone who has something worth advertising could do advertise it.
2.) Developers using iAds would see near 100% fill rates.
3.) All users would get ads relevant to them.
4.) Apple wouldn't make as much money from people signing up, probably, but that 40% that Apple takes on clicks would become much higher, because there would be a lot more clicks.

The price, as it is, is ludicrous. Only the biggest of big name brands could possibly be able to pay it, and honestly, I think their name and reputation does more for them than an iAd does in leading to sales.

Start ups you've never heard of who don't have much cash are the ones who need the extra marketing help of a compelling interactive ad, not the big names we all already know about.
 
I believe iAd is just Steve Job's annoyance that his competitors are making so much money off the iOS platform. Google has made millions, perhaps hundreds of millions of dollars by serving up ads shown on iOS devices. iAd is Apple's answer to capture some of that money being made.
 
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.
 
It must be horrible...

thetexan said:
I believe iAd is just Steve Job's annoyance that his competitors are making so much money off the iOS platform. Google has made millions, perhaps hundreds of millions of dollars by serving up ads shown on iOS devices. iAd is Apple's answer to capture some of that money being made.
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Apple is only making 10's of billions off of the iOS platform;-)
 
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.
 
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