Apple Keeps On Lowering Prices For Its iAd Packages

According to Bloomberg’s report, Apple has kept on lowering the buy-in fee for its iAd mobile advertising by reducing package prices for main advertising companies from the original buy of $1 million down to $300.000 in some deals.

Apple Inc.'s iAd mobile-advertising business has cut rates by as much as 70 percent as some marquee clients are using rival services, two people with knowledge of the matter said, signaling the company is struggling to parlay its technology leadership into success in the ad industry.

When Apple rolled out iAd a year ago, companies such as Citigroup Inc. and J.C. Penney Co. were being charged $1 million or more to run ad campaigns. Today those brands aren't using iAd, and Apple is offering packages for as little as $300,000, said the people, who asked not to be named because the rates are private.

Several months ago the buy-in fee was reduced down to $500.000 by Apple, but even such price hasn't apparently been low enough to satisfy existing advertisers and attract new ones to fill ever-increasing number of ad spaces available. The price of $300.000 is said to be proposed to companies that plan to combine multiple campaigns for iAd.

Previously Apple noted that over 100 campaigns have been already pushed through iAd with 20 advertisers have used the iAd service over the past month and 50 companies plan to debut in the next month. However, application developers said that approximately 5%-15% of the ad space in their apps is filled by ads with Apple system, which imposes limitations on the potential income through the iAd service.

As Bloomberg report reads, advertising companies are turning to cross-platform advertising services such as Google’s AdMob, Greystripe and Millenial Media that compete against iOS-only iAd. This interest in multiple-platform advertising is generated partly by growing popularity of Android, dissatisfaction of developers with iAd’s performance and high buy-in prices for iAd.

Apple intends to change the situation. Recently the company hired a well-known former executive of advertising agency to help attract brands to the iAd service and launched its iAd Producer software for making design of ads easy last December.