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Apple Bends On Mobile Ads

Losing ground to Google and its mobile-ad service, Apple is taking a friendlier approach to mobile advertising.

“Apple Inc. is learning to compromise,” writes The Wall Street Journal. “It is showing more willingness to bargain on the spending commitment it requires of advertisers.”

Launched in the summer of 2010, Apple’s iAd service originally asked marketers to commit at least $1 million -- an amount later reduced to $500,000. Now, as a source tells WSJ, Apple is now discussing mobile ad deals with a minimum commitment of $400,000.

“This is, admittedly, not an ‘Apple-like’ thing to do,” quips SplatF blogger Dan Frommer. “But neither is selling ads in the first place.” Word of Apple’s compromises coincide with the release data demonstrating the company’s struggling iAd business.

Google, which already leads the mobile-ad market, will see its share rise to 24% this year -- from 19% in 2010 -- according to research firm IDC. Apple’s share, meanwhile, is expected to decline to 15% from 19%, IDC said.

Rather than a credit to Google, “This is primarily a story about Apple’s weakness,”

ICD analyst Karsten Weide tells Bloomberg. Even more than price floors, the big issue is that Apple only lets marketers advertise on its own devices, Weide notes.

“It looks as though iAd hasn't made a big impact on the mobile advertising industry, but hopefully the changes will at least help make an impact on developer's pocketbooks,” The Verge writes. “With the average iOS app price sitting at around $2.00, every little bit helps.”

“To attract new advertisers, Apple is also establishing a marketing training program and offering campus tours to marketing executives, allowing them to make discounted purchases at the company store,” CNet notes, citing WSJ’s report.

 

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