Wednesday, February 23, 2011, 07:50 am PT (10:50 am ET)
Minimum advertising buy for Apple's iAd halved to $500KApple has cut in half the minimum purchase of $1 million for advertisers on its mobile iAd network, in an effort to attract smaller companies that couldn't afford the initial asking price.
According to John Paczkowski of Digital Daily, Apple has introduced a new entry price of $500,000 for companies that want to buy interactive advertisements on the iAd network. The company hopes that reducing the initial $1 million minimum buy will broaden the platform.
Earlier this month, a report claimed that Apple's iAd business recently began "hurting" after a strong start, with rumors suggesting that Apple was struggling to fill slots and renew contracts. Paczkowski said the price cut for iAds aims to "reverse that trend, bringing more brands to the platform and an increasingly larger portion of their annual ad spend to Apple."
Apple launched iAds in the U.S. in July, and the network got off to a strong start with major user interest pleasing advertisers, and strong revenue returns satisfying App Store developers. Apple's iAds offer rich, interactive advertising experiences from within an application, preventing the need for users to leave what they are doing and launch the Mobile Safari browser on the iPhone or iPad.
But while Apple initially found a significant share of market share, its strict control of content frustrated some advertisers, who said that the company has maintained "tight control over the creative process." Those controls were said to have caused advertisers delays in getting their iAds to market.
Apple jumpstarted its plans to enter the mobile advertising business in late 2009, when it acquired the firm Quattro Wireless for $275 million. Employees from Quattro, which one report said are responsible for securing renewals from advertising partners, allegedly had difficulty getting companies to secure $1 million or more for an iAd campaign.
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