Report: Apple Reducing The Fees On iAd Down To $500,000

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When Apple (NSDQ: AAPL) launched its new iOS advertising network iAd, most of the world (save 60 brands) balked at the price-tag for using it: reportedly $1 million minimum ad buy per campaign. Now it appears that Apple’s the one doing a double-take: the company is apparently halving that to $500,000.

The news, first reported by All Things Digital, comes with comment from Mark Read, the CEO of WPP Digital. “This new minimum buy is a great step forward and a necessary one, I think,” he says in the article.

The story does not specify whether this will be an across-the-board move or whether it will only apply to certain brands and agencies. We have contacted Apple directly to confirm the report and will update this story as we learn more. Apple confirmed to AllThingsD that “the new entry point is $500,000, a significantly smaller commitment, particularly for smaller brands and agencies that are creating and producing their own iAds.”

Since launching the iAd platform last year, and setting what some advertisers thought was an impossibly high bar in terms of budgets and workflow (Apple got approval on ads, for example), Apple has been slowly opening up the platform and making it something that could potentially work for a much wider group of brands.

In December, the company launched iAd Producer, a toolkit that lets virtually any developer create an iAd.

And when Apple launched iAd in Europe in November, there were already murmurs that it was starting to bend on its $1 million buy-in — although these have never been completely confirmed.

Back over at AllThingsD, there is also some explanation (again, not from Apple itself but from WPP) of why it is that Apple started out with such high rates for iAd int he first place: it’s because of how valuable the customers are. While the advertising on iAd is very video-centric and makes the most of the larger display of the iPad — leading some to have thought that this was Apple’s strategy for going after TV ad dollars — Read notes that Apple’s strategy was not to go directly after companies’ TV ad budgets, but to go for the “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,” he says.

But there is still a long way to go, though, before Apple gets a significant amount of market share for the platform. In a forecast of mobile advertising in the U.S. from IDC, Google (NSDQ: GOOG) accounted for 59 percent of all mobile advertising revenue, with Apple a distant second with just an 8.4 percent share, in a market worth $877 million overall.

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