Developers say Apple's iAd more expensive but more effective

While iOS developers indicate Apple's (NASDAQ:AAPL) fledgling iAd for Developers mobile advertising network is pricier than rival efforts, some say the system's effectiveness outweighs its financial pressures. Springpad developer Jeff Janner tells The Los Angeles Times that while cost-per-click rates on iAd are greater than on rival ad networks, the platform also appears to be driving more sales: "Even though they're more expensive, the fact that they're new, and that the user can download Springpad without leaving the app they're in has resulted in a better cost per download for us," Janner explains. The LA Times notes that close to a dozen iAd developer partners expressed enthusiasm for the program: "It's moderately successful, and cost effectiveness is increasing," said ngmoco vice president of marketing Clive Downie in a statement. "We use many advertising streams, so finding the perfect place for iAd in the overall life cycle of a product is still an objective for us."

iAd for Developers, introduced in late July, offers registered iPhone developers a channel to market their applications inside other apps at a cost per click rate of 25 cents. Apple declined to disclose the number of partners or sales data associated with iAd for Developers, but said that 75 percent of participating developers have either renewed their trial or increased their spending. "We're thrilled by the response to the iAd for Developers program, which is a great way for developers to advertise their own apps to millions of users," an Apple spokeswoman said.

Not all developers are sold on the iAd approach. Last month, Cross Forward Consulting founder David Smith broke down the firm's iAd for Developers experience following a week-long campaign promoting its Audiobooks Premium app, expressing serious doubts about the in-app advertising model as a whole. "I have tried just about every advertising platform around and have generally found none of them to be demonstrably effective," Smith wrote in the Cross Forward blog. "I think that this stems from the fundamentals of why people buy apps. I believe most people buy apps based on receiving a recommendation, either directly from word-of-mouth or indirectly by their position in the Charts. There is no way to realistically replace either of these recommendation systems by throwing money at the problem."

iAd will control 21 percent of the U.S. mobile advertising market by the end of 2010, according to research firm IDC. By year's end, iAd (which formally launched July 1) will be running neck and neck with rival Google, IDC forecasts--a year ago, Google accounted for 27 percent of the U.S. mobile ad market when combined with mobile ad network AdMob, which it officially acquired earlier this year, but as 2010 closes, its share will slip to 21 percent. Apple's emergence also spells trouble for Microsoft, which IDC anticipates will decline from 10 percent a year ago to 7 percent, as well as Yahoo (12 percent to 9 percent) and Nokia (5 percent to 2 percent). Independent mobile ad networks are faring much better, however: IDC believes Jumptap's U.S. market share will increase from 10 percent in 2009 to 13 percent in 2010, while Millennial Media will rise from 9 percent to 11 percent.

For more on iAd for Developers' progress:
- read this Los Angeles Times article

Related articles:
iAd for Developers cost effectiveness in doubt
Apple expands iAd platform to iPhone developers
iAd sales top $60 million in advance of iPhone 4's debut
Apple's iAd could generate $825 million for developers this year

Suggested Articles

Here are the stories we’re chasing today.

Here are some other stories we’re following.

Here are the other stories we’re chasing today.