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Are Apple's iAds in trouble?


I probably could have told you this one based on the anecdotal data I've heard from developers lately, but "insiders" have told MobileCrunch that Apple's iAd service isn't doing quite as well as Apple had hoped. The fill rate -- which refers to actual ad space that's filled with a paid ad -- has dropped from 18 percent to 6 percent according to the rumors, which means that even though Apple has developers ready to show ads, it's having trouble actually finding advertisers to pay for them.

As MobileCrunch notes, even if this is true, there could be a few reasons for this, from a bad economy to just a bad seasonal trend (that could pick back up as soon as a few months from now). But more likely, it seems, is that Apple just hasn't sold iAds well to advertisers. iAds, as Steve Jobs told us when they were first announced, are a premium product -- they are interactive, well-designed, and of course, the cost is premium as well. But advertisers may not be entirely sold on the power of mobile advertising quite yet, so Apple is likely having trouble finding advertisers both willing to take the risk and big enough to afford it.

The silver lining on this so far is that despite having trouble selling the ads, everything we've heard so far is that the ads do pay off. Not only do they increase brand engagement, but they reach solid customers in exactly the right ways. Still, if Apple can't get advertisers to sign on the dotted line in the first place, it won't have any of those success stories to talk about.

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