Developer interest in iAd strong despite marketer concerns

More than 10,000 iPhone and iPod touch developers have signed up for Apple's (NASDAQ:AAPL) fledgling iAd mobile advertising network, according to a report in The Wall Street Journal. Apple formally launched iAd on July 1, promising more interactive and immersive rich media advertisements that keep users within an application instead of transporting them somewhere else--developers receive 60 percent of revenues derived from iAds integrated into their applications, with Apple claiming the remaining 40 percent. iAd could yield developer revenues reaching $825 million this year, according to a research note published by Bernstein Research analyst Toni Sacconaghi.

Late last month, Apple introduced iAd for Developers, enabling the iPhone application development community to promote their software inside of other apps. Details on iAd for Developers are scarce--on its website, Apple indicates developers can now purchase iAd inventory to market their applications, adding "It's easy to get started, contact us today and learn how you can drive more downloads of your app."

A FAQ adds developers can exclude ads from competitors or other unwanted advertisers based on specific keywords, URLs and Apple IDs. Apple also guarantees iAd will optimize campaigns to ensure the right audience is viewing and interacting with ads. According to Business Insider, the computing giant will initially charge developers 25 cents per click, compared to the $2.00 per-click fee for brand advertisers. Apple recommends developers contact the company directly to explore iAd creation options.

Developer enthusiasm for iAd notwithstanding, marketers are voicing concern over delays that continue to undermine the network's rollout, with at least one announced pre-launch partner appearing to mothball its plans for now. The Wall Street Journal reports that among the 17 iAd partners Apple named prior to the system's July 1 rollout, only Unilever and Nissan officially unveiled campaigns that ran the duration of the month--Citigroup, the Walt Disney Company and J.C. Penney have since launched iAd campaigns, and other confirmed partners remain in the mix. However, luxury marketer Chanel--another announced iAd partner--said it no longer has plans to introduce a campaign, declining further comment.

Marketers blame the delays on Apple's insistence on retaining tight creative control over the iAd development effort--execs say the average iAd requires eight weeks from inception to completion, far longer than the norm for mobile ads. One source said the actual ad creation process, supervised by Apple, typically requires two weeks longer than anticipated. Another headache: Apple does not inform marketers where their iAd campaigns will appear, and does not allow advertisers to limit where their ads do and do not run. Despite the hiccups, a Nissan spokesperson told the Journal the iAd campaign for its all-electric Leaf vehicle "has driven exceptional results to date," adding that its iAd banner boasts a click-through rate five times greater than its corresponding web campaign.

Most marketers are spending a minimum of $1 million to launch on the iAd network, with some paying more than $10 million for levels of exclusivity within their respective industry vertical. Apple is charging $10.00 per thousand impressions for each iAd banner as well as a cost-per-click fee of $2.00. 

For more on iAd's rollout:
- read this Wall Street Journal article

Related articles:
Developers question iAd revenue sustainability
Most iAd campaigns expected to miss Apple's July 1 launch
Apple's iAd now in federal antitrust crosshairs
iAd sales top $60 million in advance of iPhone 4's debut

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