When it Comes to Mobile Advertising, it’s as if Apple is a Different Company
By: Hillel Fuld (@hilzfuld)
While Apple continues to break every record possible ($500 stock price? Really?), as far as Mobile Advertising is concerned, it seems the company has not cracked it just yet.
Apple's mobile advertising initiative, iAD, has not taken off despite Apple's aggressive attempts to make it work. For starters, when Jobs first announced iAd, the minimum cost for an advertiser was $1 million. That quickly changed once the initial hype died down and the entry point for advertisers was reduced to $500,000. That should do the job, right? Yea, not so much!
Well, looks like Apple is not giving up. Does Apple ever give up? Today, the company is reducing that price once again to a mere $100,000. According to Adage, that is one of several changes Apple is implementing in its mobile advertising offering.
The more important update is that instead of developers receiving 60% revenue share on their ads, Apple is now giving them 70%, which could amount to a lot of money with increased downloads. This is to compensate for the relatively poor performance associated with iAd such as low fill rate.
This change is also meant to add incentive to developers to create iOS apps instead of Android apps. Android devices now outnumber iOS devices in the U.S, which means a wider audience and more downloads for developers.
Adage also reports that "Apple also plans to change the way it charges for ads, which irked some advertisers and agencies. Since iAd launched, Apple has charged advertisers twice: a fixed rate for every 1,000 ad impressions plus an additional fee every time a user clicked on the ad. Apple will now charge only the cost-per-thousand rate."
As far as the U.S market goes, according to IDC, Google took 24% of the $630 million market for mobile display ads in the last year, up from 19% in 2010. Second place at 17% belonged to Millenial, the largest independent ad network. Apple's iAD had 15% of the U.S market last year compared to its 19% in 2010.
Well, as you can see, while its revenues are through the roof and its sales are off the charts, Apple is far from perfect. Mobile advertising is a tricky game and developers' revenue is not something to play around with. That is why we do what we do and our numbers speak for themselves!
As far as iAD, check out the cool interactive ad below and of course stay tuned for our next-gen mobile advertising including rich media ads, hyper-local targeting abilities, and much much more!