iAds, Cheaper… But Still Too Expensive
AllThingsD reports that Apple has lowered their minimum spend requirements for their iAd platform from $1 million to $500,000, in attempt to revitalize their ad platform. Question is, is it enough?
While lowering the threshold might entice a few more advertisers to test with Apple, several barriers still remain in place that prevent the majority of advertisers from accepting iAds as a viable consideration for advertising.
- High minimum spend: While better than the original $1 million, $500,000 is still a hefty sum to commit to – limiting the potential list of advertisers to entertainment, automotive, or large branding campaigns.
- CPM-CPC: Apple charges advertisers on both the impression and click, whereas most publishers only charge by one of the two. The CPM-CPC double fee translates out to about a $40 CPM, which for interactive ads, is limited to specialized partners or exclusive executions. Again, the high rate Apple charges excludes several advertisers, especially ones that are looking for price efficiency, direct response and in the case of mobile, mobile advertisers (games, apps, etc.)
- Creative restrictions: With the elimination of Adobe Flash and rich media, Apple controls the creative design on their iAd platform. Not only do advertisers have to dedicated (or allocate budget) to the creation of Apple-specific creative, restrictions set by the company have been challenging and perhaps even an impediment. Custom creative is estimated to take anywhere from eight to ten weeks – unheard of for interactive (let alone mobile) advertising. Chanel, which was an initial launch partner of the platform ended up dropping the campaign. iPodnn had reported similar issues with Citigroup in their workings with Apple.
- Reach: As large as the iOS ecosystem may be, the limitation of iAds is highlighted when one examines the reach of other mobile advertisers including Google’s AdMob. Apple’s system sets up an inherent contradiction – iOS advertisers (makers of games, apps) who want to advertise in iOS only are repelled by the high rates. Large branding advertisers who have the budget can get a far larger reach by choosing a non-exclusive mobile platform (across iOS, Android, WAP, etc.)
Mark Read, CEO of WPP Digital was quoted in saying “Apple isn’t necessarily targeting television ad budgets with iAds, but brand budgets. It’s after whatever portion of the Net advertising budget that it can get by offering access to this developing mobile demographic, which is a pretty valuable one.” However, until Apple resolves several other concerns, the future of iAds as a viable advertising medium remains to be seen. As Apple continues to see competition chip away at the mobile market share (to which Apple had a near monopoly of only a year back), its argument to being the destination for mobile ads will continue to dwindle. Furthermore, the lack of advertising experience on Apple’s part becomes more apparent; Rationale for iAds, given its current demands loses ground each day. Perhaps it’s time for iAds to take an ad campaign of its own.
AdMob, Adobe Flash, advertisers, advertising, apple, CPC, CPM, flash, iads, mobile advertising