Apple Cuts iAd Pricing, Boosts Developers’ Cut
It looks like Apple is taking some steps to revitalize their iAd mobile advertising platform. The company has lowered the starting price of an iAd advertising campaign to $100,000 – a mere 10% of the original price. They have also thrown a bone to app developers, increasing their take by 10% also. Now, developers get 70% of iAd-generated revenue, and Apple’s cut drops to 30%. This brings iAd into line with Apple’s other revenue sharing plans – Apple currently gets 30% of the cost of apps and in-app purchases, as well as 30% of the cost of books in the iBookstore.
In June of 2010 Steve Jobs announced the iPhone 4 and iOS 4. At the same event, he also introduced Apple’s new iAd mobile advertising platform. At the time, the minimum cost for an iAd campaign was $1 million. Revenue generated by the platform was split, with Apple getting 40% and the app developers getting 40%.
In the year and a half since, Apple has seen the initial rush of advertisers and developers dwindle considerably. They reduced the starting price for an ad campaign by 60% last year, dropping it to $400,000, but that has not been enough to put a dent in Google’s AdMob service. Unfortunately for Apple, iAd has a much narrower audience than AdMob, since it is only available on Apple’s devices. Google can put their ads virtually anywhere. It remains to be seen whether the current price drop will help Apple finally mount a challenge against its rival.