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.