Apple to charge close to $1m premium to put iAds in iPhone OS apps; up to $10m for launch iAds

invisibleSHIELD case for iPad“Setting a high bar for its debut in the advertising business, Apple Inc. aims to charge close to $1 million for ads on its mobile devices this year and perhaps even more to be among the first, ad executives say,” Emily Steel reports for The Wall Street Journal.

“Apple is hitting the road to showcase its new mobile-device advertising capability, dubbed iAd, and has indicated it could charge as much as $10 million to be part of a handful of marketers at the launch, according to a person familiar with the matter,” Steel reports. “Ad executives say they are used to paying between $100,000 and $200,000 for similar mobile deals.”

“Earlier this month, Apple unveiled iAd, a software system to offer ads in the applications available in its App Store,” Steel reports. “[iAds] are likely to start appearing in applications on its iPhone and iPod touch devices in June, and its iPad later in the year, according to the person familiar with the matter.”

“Despite the high price, ad executives at agencies from Boston to New York and San Francisco to Los Angeles have crowded into conference rooms in recent weeks to listen to the tech company’s pitch for iAd,” Steel reports. “Discussions over possible deals are ongoing but several ad executives said they are beginning to prepare creative ideas for campaigns.”

“An Apple spokeswoman said the company will sell and serve the ads and declined further comment, except to reiterate that app developers will receive 60% of the revenue. Apple gets the other 40%,” Steel reports. “Apple on Wednesday said it has scheduled a developers’ conference for June 7-11, where it is expected to unveil its next iPhone. It would be up to developers whether they want to include ads in their apps, although the financial incentive is there.”

Full article here.

21 Comments

  1. The solitaire game that my wife installed on her iPod touch (which she calls an “iTouch”), includes ads served by AdMob. I wonder how long that will last?

  2. 1m is not a big money for premium brand like Nike, banks etc that want to reach premier customer. Of course, Joe the average shop can’t afford this but that’s probably not the Ad that Apple’s after.

  3. “app developers will receive 60% of the revenue. Apple gets the other 40%”

    Sounds like Apple is willing to generate a lot of advertising dollars for it’s software “partners”. Sounds like a good deal for developers. Apple is so selfish giving them a 60% cut of the profits, right?

  4. “So we have to pay for apps that are going to “ad” us to death? Don’t think so. The HTC Incredible is looking more attractive with every misstep Apple makes.”

    You have it backwards. Jobs said that iAd was in response to all of the crappy ads that developers were displaying within their ads. Apple is simply providing developers with a better method for developers to place non-intrusive quality ads within their apps.

    So the only people who will be iAd you death are the developers. Take it up with them. Don’t like the ads they put in their apps, then don’t buy them.

    It’s amazing how people don’t listen and get it all backwards.

  5. $1 Million or more is expensive. You’d have to have a product you knew ppl really wanted to spend that much. And then you’d want to make a very compelling clever creative ad.

  6. First of all, developers should either charge money for an application or use iAds. Believe it or not, there used to be no ads on cable tv. Big cable got greedy and said “uh oh, we need to show you ads now to enable the development of content, blah blah blah”.

    We need to start considering apps as “content” and there is definitely time/energy resources spent in app development. However, this is a completely new type of market and consumers early on need to put a foot in the ground and demand to either pay for an app or view ads. I think we can all agree on this.

    There’s a problem with doing this currently in iTunes. Because we can’t demo apps, we’d basically have to trust the developer to alter the app description to say whether the app used iAds. There are a lot of honest, hardworking developers in the App store, yet there are also some bottom-of-the-barrel sleaze bags. Frankly, I don’t trust developers to do this.

    So, Apple needs to make it explicitly clear in iTunes which apps are configured to use iAds and which aren’t. Only then can consumers make the best choice about whether to buy an app.

    I don’t think Apple should enforce the iAd/charge system. Developers should be free to do what they want, but consumers need to speak with their money and only install applications that conform to this policy.

  7. @studentrights

    That’s exactly what “Drug Infested Liver” was saying. He doesn’t like the idea of being bombarded with ads, and if that turns out to be the case, he will not buy them.

    It’s amazing how people don’t listen and get it all backwards.

  8. I’d like to see if this pricing is successful with the ad buying crowd. I think it’s good that the ads are expensive. I’ll help keep out the riff raff and cut down on the number of ads in the apps. Also, this doesn’t necessarily mean we’ll see more ads, just better ads. There are already ads in our apps, many of them crapy and cost the advertiser a lot less to put there. So I don’t understand people’s negative attitude towards Apple on this. Just about everyone loved the “Get a Mac” ads. Why would you think Apple would allow anything of lesser quality on their mobile platform?

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