WSJ: Apple to charge a premium to put ads in mobile apps
When Steve Jobs introduced iAd on April 8th, he provided some details on how it would work, but not all. Now, the Wall Street Journal is reporting on the cost for early participants, and it's steep.
Apple is currently on a dog-and-pony-show tour, proclaiming the benefits of iAd to potential customers across the US. According to a "person familiar with the matter," initial participants could be charged as much as $10 million. It's a number that has some market veterans surprised.
Phuc Truong, managing director at Mobext, called it "...a hefty sum... What Apple is trying to do is certainly above and beyond what's been done in the past." Mobext's clients include Sears, Choice Hotels, Amtrak and Volvo.
Apple and developers will share iAd revenue with a 40/60 split; that is, Apple gets 40% while developers get 60%. In addition, Apple will charge advertisers US$0.01 for each ad displayed. If a user taps a banner and brings up an ad, Apple will charge $2. Under the $1 million package, the WSJ points out, costs would potentially reach $1 million with all of that tapping.
With 85 million installed iPhone, iPod touch and iPad customers, the potential customer base is huge. I tend to ignore ads in apps, but if they can provide me with something more than a picture and a pitch -- location-based store finders, coupons or a little entertainment for example -- I'll pay attention.
Now what about iAd for podcasts?
