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Apple iAd minimum buy halved to $500,000
Apple is reportedly lowering the entrance fee for its iAd platform to US$500,000, a 50 percent reduction from its launch price of $1 million. This potential reduction would benefit smaller advertisers who can now afford to get their foot in the door of this mobile advertising platform. Mark Read, CEO of marketing agency WPP Digital, echoes this sentiment when he says, "This new minimum buy is a great step forward and a necessary one, I think. Lowering the minimum buy to $500,000 from $1 million will certainly make the platform more appealing." This rumored reduction may be tied to an earlier report that suggests Apple's iAd service is not performing up to Apple's expectations. The report claims Apple's iAd fill rate has fallen from 18 percent to a paltry 6 percent, primarily because advertisers are not willing to risk a minimum of $1 million on the nascent mobile advertising platform. A drop in the minimum buy rate would attract new advertisers, especially since the ads are reportedly performing well for those companies that have signed onto the platform.
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.
