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Apple's iAd Program Struggling to Fill Slots and Renew Advertisers?

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Last week, we noted that Apple and Campbell's had commissioned a study that demonstrated that Apple's iAd mobile advertising platform offers advertisers more bang for their buck and greater brand recognition than traditional advertising channels such as television.

Apple may have felt it needed that data in order to entice advertisers to join the program, as a new report from TechCrunch suggests that fill rates for ad requests are dropping and the company's staffers are struggling to get advertisers to sign on following the initial high-publicity push that accompanied the service's launch last July.
Across the board, several developers I've spoken to confirm that "fill rates" for iAds dropped drastically after the New Year and have yet to recover. The fill rate - what percentage of the ad inventory is actually filled with an ad - for two separate developers plummeted from 18 percent to 6 percent. And in a few instances for some newer apps, none of the ad slots were getting filled, compared to nearly complete fill rates from other mobile ad networks. Others report better fill rates but as one developer says, "They have definitely come down."
The report isn't the first to note a significant drop in fill rates with the new year, and it is unclear whether the result is due to a decline in advertiser participation because of dissatisfaction with the program, expected seasonal variations in advertising spending, or simply Apple struggling to fill an increasing number of available slots buoyed by a burst of sales of iOS devices over the holidays.

But TechCrunch's report delves further into the situation, noting that the initial wave of advertisers were brought on board with Steve Jobs and other key executives personally meeting with CEOs of other companies to seal the deal, and now that that initial splash is over, the iAd program is becoming a harder sell.
After selling the initial campaigns, the relationships were dumped into the laps of junior account managers in Apple's advertising business (which came out of Apple's $275 million acquisition of Quattro Wireless last year). They are being tasked to get renewals this year from ad agencies and brands or equal or greater amounts. But the experiment is over (advertisers can now see how the ads perform) and these junior salesmen don't have access to the CEOs. They need to talk to their counterparts at ad agencies and brands, who can't spend $1 million on a mobile ad campaign so easily. One ad agency executive tells me that the iAd salespeople are suddenly calling a lot more and becoming very aggressive in pushing for renewals.
Other issues such as a lack of cross-platform compatibility and pricing structures have also been cited as reasons for advertisers being wary of coming on board, but together it appears that Apple may be having problems expanding the program rapidly enough to satisfy the growing number of apps and devices looking to tap into iAds.

Article Link: Apple's iAd Program Struggling to Fill Slots and Renew Advertisers?
 

benthere16

macrumors newbie
Oct 19, 2010
8
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I wouldn't worry too much about this. It's a good platform that's probably just too pricey for people right now. They could drop the price and find a good supply/demand equilibrium that still makes everyone money.
 
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Doctor Q

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Sep 19, 2002
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Does Apple need to make it easier to use? Change prices? Go back to schmoozing big name clients?
 
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petsounds

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Jun 30, 2007
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Another problem has been the iAd production itself. Only now is Apple letting advertisers produce iAds. Agencies usually like total control at overseeing the production process, and yet these early ads were done in a black box. Another another problem is that during the first run of iAds, Jobs would argue (literally) with ad agencies about their creative, or outright reject it. I don't know if you've worked with creative directors, but they don't like other people telling (or yelling at) them how their creative should look. Then there's a fact that Apple has been demanding huge (million +) ad buys to get on the iAd train.

Take all this together, and Apple hasn't done a very good job of being a partner with ad agencies. It's no wonder agencies are reluctant to advertise on the network.
 
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Popeye206

macrumors 68040
Sep 6, 2007
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As someone that gets hit up all the time by people in my industry to advertise... I'm guessing the Ad buyers are just getting overwhelmed with opportunities. And prices are crazy with most considering the economy.

My guess is... industry bloat and CPM needs to come down.
 
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amac4me

macrumors 65816
Apr 26, 2005
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One way to look at this is the fact that an ad platform isn't aligned with Apple's core activities (design, premium product positioning) leading to these renewal issues. We'll have to see how it plays out moving forward.
 
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Full of Win

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Ask Apple
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I've said it before Apple knows iAd is a stinker, because they will not do their own ads on it. If it was a hit, they would be using it. However, they know the internals and can see it's a BOMB.
 
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Popeye206

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You know... seems like a week ago there was another article talking about how much better the iAD response was than other platforms????

This seems to contradict that????

https://www.macrumors.com/2011/02/03/study-suggests-more-bang-for-advertisers-bucks-with-iads/

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I've said it before Apple knows iAd is a stinker, because they will not do their own ads on it. If it was a hit, they would be using it. However, they know the internals and can see it's a BOMB.

I thought you LOVED advertising since you're so pro Android?
 
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Rudy69

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Mar 30, 2009
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Funny that this article comes out now as my fill rate almost doubled yesterday and today. But iAd was a lot more profitable before xmas...
 
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scottsjack

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Aug 25, 2010
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This is Good News. There has to be a better way of paying for content rather than having yet more advertising blasted at us. You can hardly go anywhere or do anything in America anymore without being pounded by ads. I prefer to pay for ad-free aps than to have "free" ones with ads.

The few I've downloaded that have appeared with ad content have been deleted.
 
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ciTiger

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I've said it before Apple knows iAd is a stinker, because they will not do their own ads on it. If it was a hit, they would be using it. However, they know the internals and can see it's a BOMB.

iAd's only run on Apples devices, so I'M struggling to see your logic...
 
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macduke

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Jun 27, 2007
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This just goes to show, Apple can't do it all. Apple can't move into Google's territory, just like Google can't match Apple on software. Why does every company anymore have to do everything?
 
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BC2009

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Jul 1, 2009
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It's funny, Apple is usually obsessed with producing a premium experience, but with advertising that's like being an ad agency that will only produce Super Bowl commercials. The entry-level price point for iAd was/is very high -- what Apple needs here is volume. Volume is one area that Google understands really well.

Google knows volume because at the end of the day it is all they care about. Impressions translate to dollars. They could care less if the margin per unit on all Android device models is $0.25 per unit (in fact they prefer a lower price point). So long as its cheap enough to get in the hands of the masses and increase their potential number of impressions. The device manufacturers may not like it, but HP is the only one right now besides Apple who may control their own destiny.

Apple's iOS audience is large, but not all-encompassing. It is a premium audience in that it is largely made up of people who are demographically more likely to have disposable income to spend on some product. But when you are pitching an audience that is far smaller than television at a premium price with the selling points of "your get more bang for your buck" with each of our impressions, its kinda hard to prove. The "more bang" would come from an ad experience that is more memorable (e.g.: super bowl ad) and reaching a customer that is more likely to have the money to spend on your product.

I think Apple might want to consider switching from pitching "more bang" to pitching "less buck" to get more advertisers on board. The last thing they want is for the free apps that are monetized by iAd to stop coming.

EDIT: A better play might even to keep the iAd API in place for developers, but instead allow outside folks to cut a deal with Apple to feed ads to their users. Apple would take a cut per impression and not worry about the rest. The downside is that the ad may not be as pretty. Imagine if Apple and Google actually worked together again on something -- oh I miss the days......
 
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WiiDSmoker

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Sep 15, 2009
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This just goes to show, Apple can't do it all. Apple can't move into Google's territory, just like Google can't match Apple on software. Why does every company anymore have to do everything?

It's much easier for Google to out-do Apple in software than it is for Apple to out-do Google in the advertising space.
 
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Salacion

macrumors 6502a
Apr 8, 2010
810
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I've said it before Apple knows iAd is a stinker, because they will not do their own ads on it. If it was a hit, they would be using it. However, they know the internals and can see it's a BOMB.

I always love when I see your name within the comments because I always know you're gonna drop a negative bomb; with one exception; that being an article on Fox News.
 
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Popeye206

macrumors 68040
Sep 6, 2007
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It's much easier for Google to out-do Apple in software than it is for Apple to out-do Google in the advertising space.

Sorry... but that's a crazy statement. You act like what Apple's done with iOS is something you can just whip up overnight. :rolleyes:

Besides... who's to say Google is burning up the Ad space sales for their Android phones and Apps?
 
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HiRez

macrumors 603
Jan 6, 2004
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Seems like Apple overreached a bit here with iAd. The 60/40 revenue split, the very high buy-in price for advertisers, and the control exerted by Apple over the agencies (who are notorious control freaks of their own)...might have gone a bit too far and as crazy as it sounds, overvalued the Apple brand a little too much. No doubt being on the Apple ecosystem is beneficial and has a lot of value, but there's a limit to what advertisers will give up for it. The sad part is this is going to hurt developers the most, and ultimately users. If developers have fewer options for monetizing apps, users will either pay more or have fewer choices.
 
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Salacion

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Apr 8, 2010
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I've said it before Apple knows iAd is a stinker, because they will not do their own ads on it. If it was a hit, they would be using it. However, they know the internals and can see it's a BOMB.

Seems like Apple overreached a bit here with iAd. The 60/40 revenue split, the very high buy-in price for advertisers, and the control exerted by Apple over the agencies (who are notorious control freaks of their own)...might have gone a bit too far and as crazy as it sounds, overvalued the Apple brand a little too much. No doubt being on the Apple ecosystem is beneficial and has a lot of value, but there's a limit to what advertisers will give up for it. The sad part is this is going to hurt developers the most, and ultimately users. If developers have fewer options for monetizing apps, users will either pay more or have fewer choices.

60/40 is EXTREMELY steep. I think that's one huge problem right there.
 
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j-a-x

macrumors 68000
Apr 15, 2005
1,533
251
Houston, Texas
That's not good. I've noticed that my app has a very low fill rate (ie: more often than not, my app requests that iAd send it an ad to display and iAd says "sorry I don't have any ads"). Check out the free version of my app and you'll see what i mean. It will revert to AdMob if there is no iAd available to be displayed.

It's a shame because I like iAd better than any of the alternatives. There just need to be more companies running ads!
 
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jclardy

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Oct 6, 2008
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I've said it before Apple knows iAd is a stinker, because they will not do their own ads on it. If it was a hit, they would be using it. However, they know the internals and can see it's a BOMB.

What would Apple advertise? The iPhone that you are currently using? If you are looking at iAd's then Apple has already gotten your money.

I think there are a couple factors that lead to this:
1. Most ads are published during Oct-Nov-Dec because of the holiday rush, so things naturally quiet down after everybody has maxed out their credit cards from Christmas merchandise.

2. The increasing number of apps using iAd. There are hundreds of apps being added to the store every day, and many of those are apps that are now requesting iAd's. If theoretically they had 1,000,000 ad views to divy out and there were only 10 iAd enabled apps they would all have 100,000 ad views that they could use. Now if there are 1,000 iAd enabled apps this number drops to 100 ad views per app, which even crappy apps can end up getting more than 100 impressions per day.

3. The eCPM vs other networks. After the holiday season the returns of advertising are lessened, meaning the companies are going to invest less money into advertising. Since Apple charges so much for iAd these companies are looking at the cheaper alternatives like AdMob for mobile advertising. For the cost of a single click on iAd they can get around 5-6 clicks with Admob's lower eCPM.
 
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