John Paczkowski

Recent Posts by John Paczkowski

Exclusive: Apple Halves Minimum iAd Buy

Apple set the bar high for its debut in the mobile advertising business, demanding a minimum spend of $1 million from advertisers looking to hawk their wares from its iAd platform.

It was a daunting premium for a nascent system, and one that limited its appeal to big-name companies. Now, with the first run of iAd campaigns ended, Apple is lowering its minimum spend to appeal to smaller-scale advertisers who originally couldn’t afford the platform.

It’s cutting it in half.

Apple confirms 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.

“This new minimum buy is a great step forward and a necessary one, I think,” Mark Read, CEO of WPP Digital, the digital arm of global ad giant WPP, told me. “Lowering the minimum buy to $500,000 from $1 million will certainly make the platform more appealing.”

Which is exactly what the platform needs right now. Though Apple claims more than 60 successful brand campaigns for iAds and a 100 percent renewal rate, some developers feel the platform has been slow to gain traction. Evidently fill rates–the percentage of ad inventory actually filled with an ad–declined earlier this year, disappointing some iAd Network developers who were making a killing off the platform (Pinger’s monthly revenues, for example, grew from about $20,000 last summer to nearly $1.5 million in December thanks to iAds).

Presumably, lowering iAds’ million-dollar hurdle will reverse that trend, bringing more brands to the platform, and an increasingly larger portion of their annual ad spend to Apple. Because that’s what Apple’s really gunning for–despite suggestions that it’s looking specifically to commandeer broadcast TV ad budgets.

Said Read, “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.”

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