December 16, 2011 by Zach Hoffman
Before retiring from Apple, the late Steve Jobs created a mobile advertising program called iAd. The program was greeted less than enthusiastically by advertisers. This was for a number of reasons. For starters, Apple was heavily involved in the creative process; an involvement that many companies seeking ad space found restricting. In addition to that, the cost of advertising through iAd was exorbitant: one million dollars. And there is also the fact that the ads will only run on Apple devices.
As estimates for this past year’s ad revenue are generated, it’s become clear that Apple is trailing Google pretty steeply in the mobile ad market. Apple found that despite having its own mobile ad service, developers were still flocking to the Android market. There are a few companies who braved the million dollar price tag and have utilized iAd. Unilever has reported great success with the service and states that their ads are garnering more clicks through and better interaction than in other markets; while they did not discuss exact pricing, Unilever did say that they intended to renew their contract.
In a move outside their norm, it seems that Apple is attempting to compromise. They have come down (significantly) on the cost to companies wishing to advertise with their service. From one million to $500,000, for starters. They have also lowered their cost-per-click; ten dollars for every one thousand views; two dollars for every click through. Google charges anywhere from four dollars to twelve dollars per thousand views, varying contingent on the use of mobile video or advanced targeting.
In another unusual move for the company, Apple recently invited senior marketing executives from some of the world’s largest corporations for a tour of their headquarters. The execs were shown around campus and then engaged in several informative sessions headed by Apple’s product and designer teams.
It remains to be seen whether these compromises on the part of Apple will boost the success of their iAd service. They certainly seem to be on the right track; offering greater transparency, more competitive pricing and giving companies more freedom in regards to their ad designs. But will this be enough to out-sell the Google Android market? We’ll see.
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