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Apple iAd, too expensive to be viable?

Hazel Rycroft

NEW research from contentSutra has found that Apple's iAd venture could increase companies' marketing budgets dramatically.

The iAd has been marketed as a breakthrough mobile advertising platform. With it, apps can feature rich media ads that combine the emotion of TV with the interactivity of the web. For developers, it should mean a new, easy-to-implement source of revenue. For advertisers, it is supposed to create a new media outlet that offers consumers highly targeted information.

According to the research cost per thousand impressions (CPM) will be highly variable, but in some cases could wind up being triple what marketers are used to paying for banners, and double the price of a video ad on mobile. Apple is setting the minimum annual spend at $1 million for brands to use its iAd platform, but contentSutra claims the price could rocket if the ad generates a lot of clicks.

Apple is said to be charging one cent per impression and $2 per click, reports the WSJ, as well as the minimum $1 million. If campaigns are successful the brand will have to dramatically increase their budget.

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