Apple slashes iAd pricing

By Akanksha Seth | Updated: 5 June 2012 18:17 IST

Highlights

Apple's slashing the amount it charges advertisers to run a campaign on its iAd mobile ad system once again.

Apple's slashing the amount it charges advertisers to run a campaign on its iAd mobile ad system once again, according to AdAge. This is certainly irking advertisers and agencies in the process.

The new pricing comes after Apple appointed former Adobe executive Todd Teresi to lead its iAd unit in 2012.

Down from the previous $500,000 threshold, advertisers will now have to spend just $100,000 for Apple mobile campaigns running in iPhone and iPad apps. It's a hugely mind-boggling reduction from the initial starting price of $1 million in 2010, when Steve Jobs unveiled Apple's first ad product.

The demand to be the first brand to go into business with iAd was initially, very high. The Verge said it well - that as the novelty wore off, Apple seemed to realize that the million-dollar minimum far outstripped the realities of advertisers' mobile budgets.

In addition to the slashing in prices, Apple is increasing the amount it pays mobile app developers. App developers will now receive 70% of ad revenues from iAds running on their apps, rather than the 60% cut that they had before - an indication that Apple is understanding it has a problem with developer adoption, perhaps? The extra money will compensate for lower ad rates and will be an added plus for those wanting to build businesses on Apple devices.

Side by side, Apple has been losing its hold in the mobile-ad market, hurting the app developers' ability to make money from advertising. While Google took 24% of the $630 million market for mobile display ads in the U.S. last year, up from 19% in 2010, according to research firm IDC, Apple's third with a 15% hold on the market.

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Further reading: apple, google, iad, ipad

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Apple slashes iAd pricing

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