Apple slices iPhone and iPad ad rates 'by 70%'

Jobs bows to Google effect

Apple has sliced rates for its iAd mobile advertising platform by as much as 70 per cent as big name clients depart for rival ad platforms, according to a report citing two people with knowledge of the matter.

Bloomberg reports that the likes of Citigroup and JC Penney – which paid $1m or more to run campaigns on iAd when the platform launched – are no longer advertising on the platform, and that Apple is now offering campaigns for as little as $300,000.

Nonetheless, Bloomberg says, many advertising agencies are bypassing iAd in favor of platforms that reach more than just Jobsian hardware, including Google's AdMob, Millennial Media, and Greystripe.

Officially, the report says, Apple has cut the minimum iAd purchase from $1m to $500,000, but it’s offering deals for as little as $300,000 if agencies purchased multiple campaigns. Previously, AllThingsD reported that Apple had sliced the minimum to $500,000.

Apple did not respond to a request for comment. But that's because we didn't send one.

With iAd, Apple ventured into unfamiliar territory, intent on challenging the likes of Google with in-application ads spiced up with things like video. The platform was launched in July of last year, following Apple's purchase of mobile ad outfit Quattro Wireless. But it would appear that the platform doesn't exactly have the pull Apple expected it would. iAd serves ads only onto Apple devices, including the iPad and the iPhone.

According to Mobclix, a mobile ad exchange, application developers are seeing iAds fill only about five to 15 per cent of their available ad space. When an ad does run, developers get 60 per cent of the revenue. Apple told Bloomberg that it has launched over a hundred iAds campaigns in seven countries.

With the latest incarnation of its iOS mobile operating system, due later this year, Apple is offering WebGL hardware acceleration to iAd advertisers – without extending the tehnology to ad developers. So, Apple is not just cutting prices. It's offering advertisers perks that even developers can't get. ®

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