Apple is losing ground to Google in the race for mobile advertising dollars.
Last year, Apple shared the top spot in the mobile display ad market with Google, each company capturing 19 per cent, according to research firm IDC. This year, Apple fell to No 3, behind Google and independent mobile ad firm Millennial Media, capturing just 15 per cent of the U.S. market.
According to The Australian, Apple is now making uncharacteristic compromises and changes to its iAd platform (iAd is Apple’s service for selling ads within mobile apps on iPhones, iPads and iPod touches).
Having originally asked marketers to commit to spending at least $US1 million — later dropped to $US500,000 — Apple is now discussing ad deals with a minimum commitment of just $US400,000.
Apple has also introduced more flexibility to a pricing structure that has befuddled advertisers. Instead of charging marketers every time a user taps on an ad — a policy that often led to ad budgets quickly being exhausted — Apple is willing to put a cap on what it charges for the taps, according to the source. Advertisers pay $US10 every time an ad is viewed a thousand times and $US2 every time it is tapped on.
The Australian also reports that Apple has been inviting and entertaining senior marketing executives from firms including PepsiCo, Clorox and J.C. Penney visited Apple’s headquarters in California.
“They are still learning the advertising world,” says Shiv Singh, head of digital at PepsiCo Beverages.