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Apple is contacting UK digital agencies to brief mobile specialists on updates to its iAd proposition as competition in the mobile advertising sector heats up.

Apple has so far not responded to new media age requests to clarify reports that it has reduced its iAd fees to a tenth of its original amount, increased its revenue share for developers and dropped its hybrid pricing model (nma.co.uk 15 February 2012). However, several sources have confirmed that it recently contacted them requesting meetings about iAd, although the specific subject remains unclear. 

James Connelly, MD of mobile specialist agency Fetch Media, which has booked iAd campaigns to encourage downloads of its clients’ apps, said the removal of the hybrid pricing model was particularly relevant.

“A lot of people have focused on the cut in minimum spend but the big thing was that the pricing model [which charged advertisers on both a CPC and CPM basis] meant that campaigns were always going to be expensive,” he said.

James Tagg, director of client services at Mobext, a mobile specialist group within Havas, agreed that Apple’s hybrid pricing structure had been a barrier to booking iAd campaigns in the past. “Previously, there was no good reason to book an iAd campaign because there were plenty of others who were doing work that was just as good and at a better price range,” he said.

The reports came as Google’s AdWords-style auction for Admob inventory come into effect, making it much cheaper for media planners to book mobile campaigns. Among the changes was the removal of minimum bids and targeting fees.

The AdWords integration was announced via a post on the official Google mobile ads blog, which read: “Effective 15 February, the winning price is determined by the quality of the ad and the other bids on that impression; the price we charge will never exceed the advertiser’s bid.”

Andrew French, trading director at mobile specialist agency Somo, said the price reduction from Apple has likely been made to counter the move from Google.

He also added that the move was a measure to pre-empt a flood of mobile advertising inventory hitting the market with the imminent arrival of Facebook’s mobile ad proposition (Opinion, nma.co.uk 13 February 2012).

“The demand for mobile inventory is unlikely to increase as quickly as the availability, so simple market economics suggests that the price has to come down,” he said. “This is a good thing for advertisers.”  

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Published 17 February, 2012 by NMA Staff

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