Setting a high bar for its debut in the advertising business, Apple Inc. aims to charge close to $1 million for ads on its mobile devices this year and perhaps even more to be among the first, ad executives say.
Apple is hitting the road to showcase its new mobile-device advertising capability, dubbed iAd, and has indicated it could charge as much as $10 million to be part of a handful of marketers at the launch, according to a person familiar with the matter.
Ad executives say they are used to paying between $100,000 and $200,000 for similar mobile deals.
Earlier this month, Apple unveiled iAd, a software system to offer ads in the applications available in its App Store. Ads are likely to start appearing in applications on its iPhone and iPod Touch devices in June, and its iPad later in the year, according to the person familiar with the matter.
Apple is making waves on Madison Avenue with its price tag, which comes with initial demands for greater control over advertisers' marketing campaigns.
"It's a hefty sum," says Phuc Truong, managing director at Mobext, a mobile marketing business owned by Havas SA whose clients include Sears, Choice Hotels, Amtrak and Volvo. "What Apple is trying to do is certainly above and beyond what's been done in the past."
An Apple spokeswoman said the company will sell and serve the ads and declined further comment, except to reiterate that app developers will receive 60% of the revenue. Apple gets the other 40%.
Apple on Wednesday said it has scheduled a developers' conference for June 7-11, where it is expected to unveil its next iPhone. It would be up to developers whether they want to include ads in their apps, although the financial incentive is there.
