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iAd network suffering, say industry sources

updated 03:35 pm EST, Thu February 10, 2011

Apple salespeople allegedly becoming 'aggressive'

Apple's iAd network is in serious trouble at the moment, a variety of industry sources suggest. Several developers mention that fill rates for iAd fell sharply after the New Year; in particular, two separate developers say that their rates dropped from 18 percent to just 6. In some instances apps are said to be going without any iAds, despite the fact that other mobile ad networks are delivering near-total fill rates. Even some of the more positive cases are said to be showing a slip in rates.

While the trend is in part thought to stem from a normal post-holiday slump, a mobile ad technology CEO claims that the "general consensus" in the advertising industry is that iAd is "a product they don't want." An executive from an ad agency remarks that iAd salespeople have suddenly started calling more frequently, also becoming more aggressive in pushing for renewed iAd campaigns.

Several factors are reported to be hurting Apple. While iAd chief Andy Miller and Steve Jobs himself are said to have helped secure $60 million in initial iAd deals, talking to advertisers and CEOs, subsequent deals are believed to have been relegated to regular account managers on both ends. It may thus be much harder for Apple to convince companies to allocate iAd budgets, particularly as the minimum spend is $1 million.

iAds are also limited to Apple devices, unlike competition from networks such as Google. Apple further exerts control over where spots appear, and does not tell advertisers where their work is running, since the independent predecessor of the iAd division -- Quattro Wireless -- saw top apps selling out of ads while lesser ones went without. Compounding matters is the issue of accidental taps, which may be inflating the money advertisers pay without delivering genuinely interested people.

In rare cases these taps may be helping to drive CPM (cost per thousand impression) rates as high as $50 or $60, when a normal mobile ad might be worth just a few dollars. "You can't even imagine what the CPMs were -- completely off the charts," comments one developer who did well with iAds in late 2010. Typical iAd CPMs are reported to be in the lower double digits.

The latest information conflicts with a recent study arguing that iAd is even more effective than TV. The document was commissioned by Apple and Campbell's, however, the former of which has a vested interested in positive results. Campbell's may be an exception in terms of performance, especially as iAd clients like Adidas and Chanel have decided to quit.






by MacNN Staff

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Comments

  1. doctor9

    Joined: Dec 1969

    +2

    Now that I can believe

    I think Apple is in waters it's not familiar with, and thusly, the pricing model is out of touch with market expectations. Perhaps tweaking and adjustments can be made to reverse this trend, but they are needed absolutely and in haste. Time is not on Apple's side with this development.

    /

  1. Athens

    Joined: Dec 1969

    0

    AppleTV

    Took a while to get the AppleTV right. IT was out for years with pathetic sale numbers and the current release is selling well. I doubt Apple will give up on iAd's as long as it brings in money, they might put it on the side burner for a little while before they tweak it and make it better. Only after that if its still not doing well would Apple axe it. Apple has a lot of incentive to get it right though because it competes in Googles waters. So I am willing to bet it will be tweaked, it will take off some time in the future and we will be seeing different news stories about how its captured a large market.

  1. chippie

    Joined: Dec 1969

    +2

    With Apple TV

    apple has dumped down the design quality and underpriced all the competition. Hope this doesn't start a trend at apple inc.

  1. JeffHarris

    Joined: Dec 1969

    0

    AppleTV is a big iPod

    Apple finally figured out how to make a cheap AppleTV and they did it by making the thing run iOS. So, the AppleTV became a big iPod in a big plastic box with standard A/V jacks.

    Brilliant.

    When Apple finally pulls the switch and lets users run all their iPad apps on their HDTVs...
    WATCH OUT '"competition"... Game Over!

  1. facebook_Justin

    Via Facebook

    Joined: Feb 2011

    0

    comment title

    It's failing because advertisers don't want to create something people are actually interested in seeing, they'd rather make a four or five word sentence and pop it on AdWords and see how many clicks they get. Truth is that, like all Google products with the exception of search, AdWords is absolutely horrible and completely irrelevant. Apple is trying to do good for an industry filled with stupid idiots and scammers.

  1. wrenchy

    Joined: Dec 1969

    0

    Apple should


    give the boys at Google a call. The Chocolate Factory Guys would love to help any way they can.

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