Apple Inc today updated its revenue model to give developers 70%, up from 60% of the revenue coming from ads. The change was made to entice more developers to stick with iAds, even with the shrinking ad fill rates for apps.
Apple’s closed system approach to serving ads is not appealing to businesses, who are required to foot a 300K bill to buy iAds, nor is it giving developers the ad revenue they need with average fill rates of less than 20%
When iAds started, there was a 1 million dollar buy in for Advertisers, and developers received 60% of Ad Revenue. Revenue was also based on clicks instead of impressions. It seems that the Apple tax is not working for the advertising industry, whom seem to be investing in Google’s AdMob platform.
With AdMob’s fill rates in the 99%, it is a no brainer for developers to use the Google service. The irony is when Google first wanted to buy out the AdMob startup, the Federal Trade Commission halted the purchase until an investigation was done, but when Apple introduced iAd, the investigation was quickly wrapped up as the FTC decided that with Apple’s introduction into the industry, there was enough competition to allow Google to purchase AdMob. However, Google’s much expertise in the digital world has shown that it knows online marketing.
Personally, I feel as Apple is moving in the correct direction, however, it is not worth it for me to switch away from AdMob. The fill rates at iAd are terrible, and I can not see it succeeding until they open up the system to be self served, where large and small advertisers can bid on ad space. If only 15-20 percent of customers of my apps see ads, then I am not getting my moneys worth for using iAds.