Apple's iAd platform is in deep trouble, and the iPhone maker has decided to try new pricing to boost its popularity, according to a report.
Advertising industry watcher Ad Age reported yesterday, citing sources, that brands wanting to use iAd to promote their products will only need to put up $100,000 to start a campaign. When Apple launched iAd in 2010, the company required brands put up $1 million. Back in December, The Wall Street Journal reported that Apple had reduced that requirement to $400,000.
To quell some unrest among developers who hated the policy, Apple has also reportedly decided to charge brands only a single rate for every 1,000 ad impressions. Previously, Apple was charging that rate, as well as an additional fee whenever a user clicked on an ad.
Not to be left out, developers will also be getting more favorable terms, Ad Age reported. Rather than receive 60 percent of the revenue generated from ads within their applications, developers will now get 70 percent.
Apple has been trying desperately to chip away at AdMob's lead in mobile advertising. However, the Google-owned company has been pulling away, capturing 24 percent of the U.S. mobile advertising market last year, up 5 percentage points year-over-year, according to research firm IDC. Apple, meanwhile, saw its share drop from 19 percent in 2010 to 15 percent last year. At the same time, Millennial Media has swooped in and captured the second-place spot in mobile ads with 17 percent share.
However, gauging the mobile advertising business is extremely difficult, and market share figures are constantly in flux. That's why research firm eMarketer's findings from last month look somewhat different from IDC's. eMarketer reported that while Google's AdMob owned 24.8 percent of the U.S. mobile ad market last year, Apple's iAd was actually in second place with 18 percent share. Millennial Media's market share stood at 17.7 percent, according to eMarketer.
Apple's platform is at a bit of a disadvantage. Both AdMob and Millennial Media's service are platform-agnostic, allowing developers to place those ads on Android, iOS, and even Windows Phone. Apple's service, meanwhile, is exclusive to iOS.
Still, even when developers use iAd, they're apparently not too pleased with the experience. In fact, David Barnard, developer at mobile app company App Cubby, told The Wall Street Journal late last year that just 13 percent of his apps' ad requests were filled by iAd that and in the previous month, he had only generated $320 from the service.
Update 10 a.m. PT to include eMarketer stats.