Apple iAd Aims Upscale

To participate in the launch of Apple's forthcoming iAd mobile advertising platform, the company is reportedly asking advertisers to pony up as much as $10 million.

Apple wants to make a splash with its iAd platform and has been conducting a roadshow for industry insiders, according to The Wall Street Journal.

Typical buy-in for mobile advertising programs of this sort has tended to be in the $100,000 to $200,000 range, The Wall Street Journal said.

The premium pricing reflects Apple's desire to launch with premium ads from well-known brands.

"Apple has done what nearly every ad network wants to do: find a way to turn millions of high-end consumers with a disposable income-the very consumers who buy Apple products-into a captive audience for advertisers," said Mark Simon, VP of industry relations for search engine marketing firm Didit, in an e-mail. "Obviously, Apple wants to tap into that audience to offer advertisers a direct, premium ad buy."

Apple announced iAd when it presented a preview of its iPhone OS 4.0 earlier this month. In an attempt to differentiate the iAd experience from other mobile advertising, the company said that iAds will combine the emotional impact of television ads with the the interactivity of Web ads.

As with many technological challenges it has tackled, Apple seeks to deliver a superior user experience at something above a commodity price point.

In its description of iAd, the company characterizes the typical mobile advertising experience as disruptive. Such ads take users out of the app they were using by opening a separate Web browser window. Apple promises to improve the experience by delivering ads inside apps.

Apple says it plans to take 40% of iAd revenue, leaving "an industry-standard 60%" for developers.

Where this leaves other mobile ad networks remains to be seen. Apple's contractual language for its iPhone OS 4.0 SDK limits the scope of analytics data available to developers, suggesting that Apple's platform will have an advantage over other third-party mobile ad networks.

If iAd succeeds in offering a superior user experience and Apple's rules continue to put third-party networks at a disadvantage, companies like AdMob and Flurry are likely to shift their focus to Android and other mobile platforms where the playing field is move level.

"At this point, there's very little upside for Apple to deliver other networks to its highly coveted audience," said Simon. "I'd predict that we're looking at an exclusively Apple offering for the foreseeable future."