Reports in the last week indicate that Apple are cutting costs to advertise through their iAd platform. The reports by news agencies such as Bloomberg show a drop by as much as 70 percent for companies wishing to advertise.
When the iAd system was initially launched, CitiGroup and a few other organisations were paying more than $1 million to run their campaigns. Reports highlight that Citigroup and a few other big players have since left the platform and have moved elsewhere. Apple are apparently dropping the prices to $300,000 or less, according to a private source who spoke to Bloomberg.
While Apple are losing some campaigns, it appears that agencies are moving to Google AdMob, as the audience is broader, and won’t just target Apple users. This is a huge market, and EMarketer have reported that the industry will be set to generate up to $2.5 billion by 2014.
Thom Kennon, senior vice president of strategy for Young and Rubicam ad agency in New York has said that they didn’t offer competitive rates. ““Apple’s closed ecosystem may have been interesting in the short run for advertisers, but in the long run they priced themselves out.”
Apple are said to have cut their minimum ad purchase from $1 million to $500,000 and will drop as low as $300,000 if multiple campaigns can be agreed.
Kitguru says: Is the pricing good enough now to attract more customers? Time will tell.