updated 10:00 am EDT, Thu April 29, 2010
Costs would be unprecedented in mobile ads
Apple is hoping to charge extremely high premiums for participating in its iAd mobile advertising service, according to sources for the Wall Street Journal, which include ad executives. iAd differs from normal advertising on Apple handhelds in that promotions can launch within an app, while still pushing interactive and multimedia content on viewers. Apple is said to be asking nearly $1 million, however, for placing a spot under iAd in 2010.
Ad executives say that such a price is several times standard rates, which for equivalent mobile deals would be between $100,000 and $200,000. One source claims that Apple is charging even more for companies hoping to be among the launch advertisers in June, potentially as much as $10 million. Even then Apple is said to be asking for greater control over how marketing is presented on its platform.
This includes hands-on approval and development from Apple, at first, to meet functional and aesthetic criteria. A development kit will be released eventually, but in the meantime, some parties are are said to be wary about giving up creative freedom. Also, while iAd is said to offer potential for mobile advertising profit, other complaints suggest that the technical demands of iAd may make it no easier to work with than the alternatives, such as AdMob.
Regardless, ad agencies in Boston, New York, Los Angeles and San Francisco are said to be listening to pitches for iAd, and in some cases talking deals, or preparing initial campaign ideas. The pricetags for Apple's system are said to derive from impression fees; while simply displaying an ad should cost an advertiser a penny, if someone actually taps on one, the fee jumps to $2. Companies will moreover have the privilege of targeting people based on their downloads at the iTunes Store, in addition to broader criteria like a viewer's city.