Apple had high hopes when it introduced its iAds mobile advertising platform a few years ago, but the service has largely failed to pick up any traction with advertisers. Last year, it was discovered that former top clients had ditched iAds and flocked to its competitors, which resulted in Apple making changes to the ad service such as lowering the minimum buy-in price from $1,000,000 to $300,000, and later to just $100,000.
And now, Apple has increased the share of revenue that advertisers receive from 60 percent to 70 percent, leaving the Cupertino-based company with a 30 percent stake. This is the exact same revenue sharing model that Apple employs with its App Store system, which gives developers 70 percent of the revenue made from the sales of their apps.
A developer familiar with iAds told 9to5Mac that Apple could be increasing the amount of revenue it provides to its iAds developers as a way to compensate for no longer tracking ad clicks, but rather ad impressions only. Apple noted the changes in its developer agreement:
(a) Apple Campaigns. Developer shall receive seventy percent (70%) of the Net Advertising Revenue derived from the sale of advertising on the Developer’s Mobile Properties (“Developer Revenue Share”) net of any applicable taxes as provided in Section 6 of this Agreement. The Developer Revenue Share percentage may be adjusted from time to time at Apple’s sole discretion. Notice of material changes to the Revenue Share percentage will be posted on the Company Portal. “Net Advertising Revenue” is defined as gross advertising revenue recognized through the delivery of ads by Apple less: a) any allowances actually made or taken for returns, credits, cash discounts and promotional allowances; and, b) Agency and agent fees, discounts, commissions and referral fees.