Apple To Charge A Premium For Premium Mobile Advertising

More details regarding the price-plan Apple intends to use upon the launch of its iAd platform came out today in a Wall Street Journal article, indicating the company will charge upwards of a $1 million for certain ad-buys. To be among a select group of advertisers at launch, however, could cost $10 million or more, …   Read More

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Apple To Charge A Premium For Premium Mobile AdvertisingMore details regarding the price-plan Apple intends to use upon the launch of its iAd platform came out today in a Wall Street Journal article, indicating the company will charge upwards of a $1 million for certain ad-buys.

To be among a select group of advertisers at launch, however, could cost $10 million or more, the article suggests.  Ad executives say they’re used to paying between $100,000 and $200,000 for similar mobile deals, but Apple is certainly putting a premium price on it’s so-called premium mobile advertising opportunities.

Apple is planning to charge advertisers a penny each time a consumer sees a banner ad, ad executives say.  When a user taps on the banner and the ad pops up, Apple will charge $2.  Under large ad buys, such as the $1 million package, costs would rack up to reach the $1 million mark with the various views and taps combined.

“It’s a hefty sum,” says Phuc Truong, managing director at Mobext, a mobile marketing business owned by Havas SA whose clients include Sears, Choice Hotels, Amtrak and Volvo. “What Apple is trying to do is certainly above and beyond what’s been done in the past.”

While the prices seem high, the opportunities are unique for mobile advertisers, and ad executives agree.  Apple has sold 85 million iPhone and iPod Touches so far and estimates that users spend about 30 minutes a day using applications.

Marketers will be able to target ads to groups of users based on consumers’ download preferences from its iTunes store, according to ad executives. For instance, a marketer could choose to show its ads to people who have downloaded financial applications or reggaeton music, horror movies or comedy TV shows.

Though this is all still speculation, Apple’s iAd road-crews are hot on the trail visiting top agencies around the country buttering them up for the initial launch.  With such hefty price tags, it should be interesting to see who takes the bait first, and what kind of interactive and engaging creative they can come up with after paying such a premium.

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