Apple will be rolling on its iAd service on Thursday and open up a potentially very lucrative revenue source for application developers as well as another revenue source for itself. It’s a high-rollers market now, but don’t expect mass advertisers to be playing ball just yet.
Recent reports indicated that iAds are commanding huge premiums. The first row of advertisers is reportedly shelling out at least $1 million each for the privilege to get advertising exposure. If you intend to cover channel exclusivity, the price can top $10 million. Apple recently said that it has already sold $60 million in committed ads – which Apple claims is about half of the total committed ad spending for mobile platforms this year. Among the first advertisers are AT&T, Best Buy, Campbell Soup Company, Chanel, Citi, DirecTV, GEICO, GE, JCPenney, Liberty Mutual Group, Nissan, Sears, State Farm, Target, Turner Broadcasting System, Unilever and The Walt Disney Studios.
iAd pricing is the highest in the mobile segment, as far as we know. Banners get $10 for 1000 hits, once click gets $2. It is interesting to note that all ads will be targeting the iPhone initially, as iOS 4 will not be available for the iPad until November. AppleInsider recently wrote that most advertisers are still in the early planning stages for their iAd campaigns and that they aren’t ready to roll their ads out just yet. By the end of the year, iAds should have much greater traction.
Some advertising agencies seem to be unhappy about the fact that Apple controls the technical production of iAds itself. According to AdAge, Apple tells advertisers that it takes about 6 – 8 weeks to run an ad after the artwork has been delivered. However, this fact does not seem to turn down many customers.
“Any brand that does it is instantly aligned with Apple,” said Darrell Whitelaw, creative director of mobile shop MIR, which is designing Citi’s iAd, in an interview with AdAge. “It’s instant credibility, instant cool. You’re on the new iPhone 4; it really is the one way you can align yourself with that little Apple logo.”
iAds require iOS 4, which means that the iPad will not get iAds for now. However, AdAge said that it has noticed iPad campaigns being scheduled for November, which would mean that iOS 4 will be coming to the iPad in that time frame.