Apple Slices iAd Buy-In Fee for Advertisers in Half

[samcraig]

I'm surprised at the breathless trolls talking about iAds' as a failure. Starting with a limited market and then opening it up to more customers is the same thing Google did with Gmail, among so many other "sinking ships" that have opened their gates to more customers. More apps are adding in iAds since its launch, and more iphones are being sold (*cough*Verizon). Apple had artificially restricted their own market for iAds during launch, and are STILL leaving a rather steep barrier to entry.

How is anyone interpreting this as an indication that iAds have failed? You'd need a lot more information than "we have more ad slots to fill" to make that sort of judgement.

Most people fail to understand the true success of iAds...As a developer of a small news app, with about 10,000 unique users a day...I used iAds as the primary ad platform, and backed it up with Admob.

I found that serving up iAds gave the following results:

- About 40% - 50% fill rate.
- About 0.15% click through rate
- About $5 eCPM

I found that serving up Admob adds gave the following results:
- about 98% fill rate
- about .22% click through rate
- about $0.17 eCPM

The BIG difference here is eCPM...because Admob will pretty much advertise anyone, they pay ALOT less...so as a developer, I generally made about 20 times more per month using iAds...so as a developer, I think iAds is a HUGE success...I make MORE money for LESS users...you can't beat that...

One of the reasons for this is Apple being strict about who gets in, and what kind of ads they can display...this level of control is fine by me as long as Apple pays MORE...

So just because people think that iAds has been a failure because of complaints about high entry fees, and lower fill rates than competitors, you have to look and the entire picture...and what I have found is that it has been more profitable than admob for most developers I know...and that equals SUCCESS

None of the above matters. If Apple makes it difficult/impossible/hard/unfriendly to work with them in executing their creative - they simple won't buy. Several companies bailed on iAds NOT because of the potential but because of the work flow and time frame it took to get an iAd into the system.

If iAds is a failure - and history/the future will be the arbiter - it's not because of the potential or actual audience - it's because of the way it was executed. Period.

 

[zenio]

Sounds like they're trying to save a sinking ship.

Sure does.

 

[belsokar]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_2_1 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8C148 Safari/6533.18.5)

Why haven't they slashed the price of the current model iPhone by half? Because it sells. You don't cut your price by half when you don't have to. Clearly they feel the need to do such a drastic thing and likely it's because it's failing. It may be more profitable for those who use it but it has not been as profitable as Apple would like. 500k is better than 0k.

Kind of apples and oranges here...They are slashing the cost of entry...They are not slashing the cost to advertise. I suspect Advertisers will still pay the same cost per click that they were before, or else developers will not be too happy...however, by requiring only $500K to become an advertiser, they are allowing less money up front to commit, thus enticing more advertisers to try out the program...

With that said, they definitely don't have enough ads to fill requests like admob...this is probably due to not as many advertisers, as well as the success of the iAds platform as well as it's mobile devices, drawing more and more developers, and more and more ad requests, and not being able to keep up with that demand...lowering the entry rate to $500K will hopefully draw more advertisers into the arena, driving up fill rate for developers, as well as profit for Apple...

Again, seeing this as a failure tactic, rather than looking at the entire picture, shows the relative lack of knowledge of the general public when it comes to all the REAL successes of the iAds program...let's not forget it's not even a year old...and it already has become the #1 source of advertising profit for developers...that is a sign of success...in order to keep developers happy though, they need to attract more advertisers...and that's what they're doing...

 

[belsokar]

Sure does.

Sorry, but again, a sign of ignorance...try writing two apps, both with advertising...one with admob, and one with iAds...I GUARANTEE you it will take you one day to re-write all your code to use iAds as much as possible...ship is not sinking...ship is ready to set sail, and Apple is adjusting it's practices (including cost of entry, ad creation process, etc...) to drive the increase of demand...

 

[belsokar]

None of the above matters. If Apple makes it difficult/impossible/hard/unfriendly to work with them in executing their creative - they simple won't buy. Several companies bailed on iAds NOT because of the potential but because of the work flow and time frame it took to get an iAd into the system.

If iAds is a failure - and history/the future will be the arbiter - it's not because of the potential or actual audience - it's because of the way it was executed. Period.

Actually, all above the above matters...MONEY matters to developers, and successful response to advertisers matters...now I agree apple has made the barrier to entry initially difficult...but that is likely because they don't want all the crap that admob has...but since then, Apple has increased it's advertisers (while losing some), and they have simplified the creative process (tools that don't require apple to do all the work), and now lowered the cost of entry...they are responding because they now realize how successful it has been (as well as where they have failed)...and are making conditions better for all...this is what ALL companies should do...again, if you want to knock iAds...go for it, go with Admob, and work 20-30 times harder to make the same amount of money...

 

[AidenShaw]

only one more time needed....

Derrrrrr.


Do that 3 more times and you might actually get some takers, Apple.

Actually, if they dropped it by $500K one more time they'd get some takers.

 

[WestonHarvey1]

It's interesting that my miserably performing app generates about $20 a quarter from this "sinking ship". If I'm entitled to that much of the pie with the downloads and usage I get, I find it hard to believe the program is a failure.

 

[AidenShaw]

It's interesting that my miserably performing app generates about $20 a quarter from this "sinking ship". If I'm entitled to that much of the pie with the downloads and usage I get, I find it hard to believe the program is a failure.

I'm confused by this - you paid a million dollars for the Iad program, and you're happy with $80 per year?

What part of the original post's

The minimum buy-in set for the program's launch last July was $1 million, but Apple has apparently reduced that number to $500,000 in order to entice new advertisers unwilling to spend a full $1 million to come on board

message did I miss?

 

[gavin83209]

@AidenShaw: As I understand it, any developer can use iAds in their app while anybody who wants to submit an ad needs to pay $500k. Both the developer of the app and the maker of the ad get a cut from any tap-throughs.

 

[awksus]

I'm surprised at the breathless trolls talking about iAds' as a failure. Starting with a limited market and then opening it up to more customers is the same thing Google did with Gmail, among so many other "sinking ships" that have opened their gates to more customers. More apps are adding in iAds since its launch, and more iphones are being sold (*cough*Verizon). Apple had artificially restricted their own market for iAds during launch, and are STILL leaving a rather steep barrier to entry.

How is anyone interpreting this as an indication that iAds have failed? You'd need a lot more information than "we have more ad slots to fill" to make that sort of judgement.

I don't really think comparing Gmail to iAds is appropriate; Gmail was a public invite beta, I believe the comparison here would be more aligned with Google's Adwords or AdMob, in which Google's Adwords startup was quite different from Gmail's startup campaign and procedures. I don't think anyone is saying failure, but as evidenced from AAPL annual SEC and shareholder report filings, the iAd revenue has been less then some anticipated. I agree with you though, that the correlation of i-devices sold is going to be positive with (eventual) growth in IAds.

 

[AlmostThere]

...so as a developer, I think iAds is a HUGE success...I make MORE money for LESS users...you can't beat that...

Anybody getting $5 for something worth $0.17 would be happy!

The fact that some developers are doing so well is the nub of the problem. iAd space is way over-priced (from the advertisers' perspective) hence the low fill rate and the need to lower barriers to entry.

The people who need to win for iAds to be a success are the advertisers, not the developers. Perhaps your view would change if you were paid based on the sales made via your ad, rather than by click or impression?

 

[samcraig]

Anybody getting $5 for something worth $0.17 would be happy!

The fact that some developers are doing so well is the nub of the problem. iAd space is way over-priced (from the advertisers' perspective) hence the low fill rate and the need to lower barriers to entry.

The people who need to win for iAds to be a success are the advertisers, not the developers. Perhaps your view would change if you were paid based on the sales made via your ad, rather than by click or impression?

Exactly. Apple cares about the developers simply because without them, they can't deliver the insertion rate for the advertisers. That's pretty much where the "caring" ends. They couldn't care less if you got .01 or $500 per day other than that would mean that THEY were getting a much larger percentage of the pie as that means ad sales are booming.

And if developers are making great scratch now - that means that iAds hasn't been largely adopted (yet) - because the numbers speak for themselves. If you are taking in $x amount and that's being shared by everyone involved - the more you're getting means the less people in the "pool" of revenue shares. Because we know that the amount of advertisers/ads isn't great (now). Apple's not giving developers money out of THEIR (direct) pocket.

So it's the advertisers who have to have incentives to buy in. And prior to this decrease - the incentive and process by which to get their ad actually IN the program was arduous and expensive.

If Apple has not only reduced the entry point, but also the strong hold on the editorial side, then iAds could definitely see a boost. If not, then it won't. And anyone who thinks otherwise hasn't spent a day in advertising on either side of the table.

 

[AidenShaw]

@AidenShaw: As I understand it, any developer can use iAds in their app while anybody who wants to submit an ad needs to pay $500k. Both the developer of the app and the maker of the ad get a cut from any tap-throughs.

Thanks - didn't make that connection.

 

[charlituna]

Sounds like they're trying to save a sinking ship.

Or not.

After all the 'report' that Apple is having trouble with iAds was another blog full of sources etc.

It is possible that this report is bunk and the drop in prices is just more of the same 'opening up' tactics that Apple has used for new endeavors. They did the same thing, for example, with iTunes LP. Allowing only a select group of big name labeled stars access and then when the bugs were more or less worked out, releasing an SDK that everyone could use.