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Apple Trims iAd Campaign Cost, Raises App Revenue Share

Published on February 15, 2012

Apple is dropping the minimum charge for ad campaigns on its iAd mobile system, reports Ad Age, and is raising the percentage it pays mobile app developers.

Advertisers will now pay just $100,000 for mobile campaigns running through iPhone and iPad apps—a $400,000 drop from the previous threshold, and $900,000 from 2010 when iAd was launched. AdExchanger laconically observed that Apple has given itself “a haircut.”

iAd was a “compelling idea when it made its debut,” observed paidContent, and mobile ads hold excellent potential. Still, “Ad formats created for other devices don’t necessarily work on the small screen found on the iPhone.” Video and rich graphics simply don’t play as well on the screens as do “quick and dirty” ads (e.g., from Google AdMob), with their far lower costs.

App Revenue Shares now 70%
App developers will now take 70% of ad revenues from iAds running on their apps, a boost of 10%. And, Apple will now chare per 1,000 ad impressions, and do away with pay-per-click.

Ad Age observes that Apple has been steadily losing share in mobile ads. In last year’s $630 million market for mobile display ads, Google took 24%, up from 19% in 2010. Millennial Media took 17%, and Apple, 15%.