1. Akshay Masand's Avatar

    Apple has reportedly shifted the focus of its iAd sales team toward bringing in advertisers for the iTunes Radio service, with plans to move the company’s advertising business to a new real-time bidding system. Eddy Cue, Apple’s software and services chief, is said to have personally handed down the order to key in on iTunes Radio inventory according to a report from AdWeek. The change comes just days after former terrestrial radio marketing executive Michael Pallad’s appointment as head of iTunes Radio’s international sales team.

    Rumors of a strategic shift for iAd’s sales force began even before iTunes Radio was officially announced. Previously, word of the alleged change and indication of Tim Cook searching for ways to increase iAd’s revenue in the face of stiff competition arose from a report from Bloomberg.

    Apple’s iTunes Radio, which debuted alongside iOS 7 this summer, has ramped up its listener base relatively quickly. 20 million users had streamed more than 1 billion songs just one month after the service’s release. That being said, the service has yet to catch up to the established players such as Pandora and Rdio in the streaming audio space. In addition to Apple, Google, Pandora and Radio, Stockholm-based Spotify threw also announced free, ad-supported streaming on mobile devices last week as well.

    As of right now, advertisers including Nissan and McDonald’s were rumored to pay up to $10 million to gain exclusive access to their category’s advertising inventory on iTunes Radio at launch and new campaigns are said to begin at roughly $1 million. iAd’s display advertising business, however, seems to have struggled. Despite Apple’s loftier customer demographics and iAd’s status as the first major mobile ad network to secure Media Ratings Council accreditation, in-app advertising rates on the service have steadily declined from a reported minimum $1 million commitment at launch to just $100,000 today.

    The Cupertino California company hopes to reverse iAd’s in-app fortunes by moving to a self-serve, real-time bidding system. A real-time bidding system would allow advertisers to target their ads more effectively and efficiently while possibly making Apple’s service more financially accessible to smaller advertisers. We’ll have to see how things turn out in the future by being patient.

    Source: AdWeek

    Twitter: @AkshayMasand
    2013-12-17 01:34 PM