Apple Slashes iAd Pricing Again as Mobile Ad Share Declines

Apple is once again slashing the minimum amount it charges advertisers to run a campaign on its iAd mobile ad system and boosting the amount it pays mobile app developers.

Advertisers will now have to spend just $100,000 for Apple mobile campaigns running in iPhone and iPad apps, down from a previous $500,000 threshold and a significant reduction from the initial starting price of $1 million in 2010, when Steve Jobs unveiled Apple's first ad product. In addition, app developers will receive 70% of ad revenues from iAds running on their apps, vs. their previous 60% cut. The extra money will compensate for lower ad rates and serve as added incentive for developers to build businesses on Apple devices, even though they may grab a bigger audience or more ad revenue creating apps for Google's Android devices, which now outnumber Apple smartphones in the US. Apple also plans to change the way it charges for ads, which irked some advertisers and agencies. Since iAd launched, Apple has charged advertisers twice: a fixed rate for every 1,000 ad impressions plus an additional fee every time a user clicked on the ad. Apple will now charge only the cost-per-thousand rate.