Advertisers Find iAd Too Expensive, Flock To Competitors

The mobile advertising industry is expected to generate $2.5 billion in revenue by 2014, but Apple might not be a significant player in that market. Bloomberg reported on Thursday that once top-level iAd clients such as J.C. Penney and Citigroup are no longer a part of Apple’s mobile advertising business, which was originally charging them up to $1 million for ad campaigns.

Apple is now offering packages for as little as $300,000, up to 70% off, to attract brands back to their advertising platform. It’s not all about the lower prices, however, as most brands and developers are flocking to competing advertising agencies  such as Google’s AdMob and Millennial Media because the advertisements appear across a variety of devices rather than being restricted to just the iPhone, iPod touch, and iPad.

“Apple’s closed ecosystem may have been interesting in the short run for advertisers, but in the long run they priced themselves out,” said Thom Kennon, senior vice president of strategy for the Young & Rubicam ad agency in New York.


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