AdAge: Apple's iAd is 'double dipping'

May 4, 2010: 12:50 PM ET

Madison Avenue casts a wary eye on Steve Jobs' new iPhone/iPad advertising platform

Source: Apple Inc.

Most mobile ad networks charge either a set rate per 1,000 impressions -- the so-called CPM. Or they charge a rate for each time a customer clicks on an ad -- the CPC.

Apple's (AAPL) new iAd advertising platform, according to a report in Monday's AdvertisingAge, is charging for both. Marketers who want to reach iPhone, iPad and iPod touch users through iAds will have to pay $10 per thousand impressions plus $2 per click.

"Apple is reinventing mobile ad pricing," write AdAge's Kunur Patel and Michael Learmonth, "and not in a good way."

For example, AdMob, the mobile ad company whose acquisition by Google (GOOG) is being scrutinized by the FTC, charges $10 to $15 CPM on average, but doesn't add costs per click. If advertisers buy CPC campaigns, AdMob's rates are 15¢ to 30¢ per click.

In addition, because Apple hasn't released an iAd developer's kit, creative directors will need Cupertino's help to build their ads -- a service for which Apple is charging top dollar. For agencies spending less than $1 million on iAd buys, Apple is charging $50,000 to $100,000, according to agency executives. That's about twice today's going rate.

What do advertisers get in return? According to AdAge:


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