Is Apple iAd another strategic blunder?

Along with Apple’s Final Cut Pro X mess, I wonder if iAd is another strategic blunder from the Apple’s C-Suite. Here is a brief excerpt from Bloomberg “Apple’s IAd Mobile Business Is Said to Trim Prices as Advertisers Defect” (emphasis added),

“Apple Inc. (AAPL)’s iAd mobile-advertising business has cut rates by as much as 70 percent as some marquee clients are using rival services, two people with knowledge of the matter said, signaling the company is struggling to parlay its technology leadership into success in the ad industry.

When Apple rolled out iAd a year ago, companies such as Citigroup Inc. (C) and J.C. Penney Co. were being charged $1 million or more to run ad campaigns. Today those brands aren’t using iAd, and Apple is offering packages for as little as $300,000, said the people, who asked not to be named because the rates are private.

Even with lower prices, some advertising agencies are balking at iAd’s cost, especially because the promotions only reach Apple users. They’re turning instead to Google Inc. (GOOG)’s AdMob, Millennial Media and Greystripe, which serve a range of devices. That means Apple risks losing ground in a market that will generate $2.5 billion by 2014, according to EMarketer Inc.

“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.”

2 Responses to Is Apple iAd another strategic blunder?

  1. Mac DaNewf says:

    It’s unfortunate that these companies fail to see the value in advertising to the “higher income” owners of mac products.

  2. kempton says:

    Companies like Citigroup Inc. and J.C. Penney Co have been spending big ad dollars for a long time. I doubt they didn’t check their numbers before they got out of iAd.

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