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. El Guapo @ 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.

    No that’s not what he was saying.

    Drug Infested Liver @ “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.”

    Apple’s misstep? The developers were the ones placing ads in their apps. It was Apple that recognized how horribly they were and came up with a system to improve them. How is that Apple’s misstep?

    You can be sure of one thing, if developers are doing it on the iPhone, they’ll be doing Android and the BlackBerry where their is no guidance whats-so-ever.

    Apple made the right move to improve the ad system.

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

  2. Just a li’l ol’ FYI:

    This does NOT mean that all apps will contain ads. It is up to the developer to include them or not. Paid apps could contain ads or not. Free apps could contain ads or not. If an app doesn’t have ads in it now, there’s a good chance it will remain as is.

  3. @ Military Police

    You got it right. Developers not Apple determine if ads go in their apps. Apple simple made iAd to make them better for the developer and user, if the developer chooses to include them.

    Android, Palm OS and the BlackBerry will still be subject to ads but they will simply suck more. Watch these copycats as they come out to play the same game.

  4. This is the advent of the free magazine/ newspaper app that makes money from embedded ads. Not much different from papers today, except they charge individuals, to keep the paper from being free, and therefore subject to being wasted. Apple sells the reader hardware to individuals up front. The paper makes money by having content that will generate ad views.

    I don’t think this is going to work out well. Fox News generates views, but to what end and by what process? Sensationalism and hyperbole toward a wrong end saw the rise of Hitler in Germany. Who does Fox News support? Of course, Apple could always reject the app.

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