Apple’s million dollar ad charges

Setting
a high bar for its debut in the advertising business, Apple Inc. aims to charge close to $1
million for ads on its mobile devices this year and perhaps even more to be
among the first, ad executives say.

Apple
is hitting the road to showcase its new mobile-device advertising capability,
dubbed iAd, and has indicated it could charge as much as $10 million to be part
of a handful of marketers at the launch, according to a person familiar with
the matter.

Ad
executives say they are used to paying between $100,000 and $200,000 for
similar mobile deals.

Earlier
this month, Apple unveiled iAd, a software system to offer ads in the
applications available in its App Store. Ads are likely to start appearing in
applications on its iPhone and iPod Touch devices in June and its iPad later in
the year, according to the person familiar with the matter.

Apple
is making waves on Madison Avenue with its price tag, which comes with initial
demands for greater control over advertisers’ marketing campaigns.

“It’s
a hefty sum,” says Phuc Truong, managing director at Mobext, a mobile marketing
business owned by Havas SA whose clients include Sears, Choice Hotels, Amtrak
and Volvo. “What Apple is trying to do is
certainly above and beyond what’s been done in the past.”

An
Apple spokeswoman said the company will sell and serve the ads and declined
further comment, except to reiterate that app developers will receive 60 per
cent of the revenue. Apple gets the other 40 per cent.

Apple
is planning to charge advertisers a penny each time a consumer sees a banner
ad, ad executives say. When a user taps on the banner and the ad pops up, Apple
will charge $2. Under large ad buys, such as the $1 million package, costs
would rack up to reach $1 million with the various views and taps.

The
audience is sizable: Apple has sold 85 million iPhone and iPod Touches so far
and estimates that users spend about 30 minutes a day using applications.

0
0

NO COMMENTS