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Apple's iAd for Developers is a (sometimes expensive) work in progress, app makers say

September 22, 2010 |  1:21 pm

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Apple's advertising program for mobile developers, which lets app makers market their wares to iPhone and iPod Touch owners, may have something in common with Mac computers.

Like the popular assessment of the Mac, iAd for Developers is pricier than competitors' systems, several app creators said -- though it may work better in the long run.

The Apple-only mobile advertising system helps app creators sell their apps -- from inside other apps. While inside one app, tapping on a developer's iAd banner opens a page that lets users easily buy a second app. Using Apple-supplied demographic info, developers can target the Apple users they believe are most likely to buy their app.

This leg of Apple's new digital advertising effort differs from the more frequently spotlighted iAd program that involves a Rolodex of major corporate advertisers.

Creators of the more than 250,000 apps can sign up in the hope of increasing exposure to their software. Unlike the more exclusive iAd program, which has reportedly cost early partners $1 million to buy in, developers pay only when their banner is clicked on.

But that rate tends to be higher than for other similar services, according to developers with experience using mobile ad networks like Google-owned AdMob and Quattro Wireless (now owned by Apple).

Jeff Janner's company used iAd for Developers early on to promote Springpad, a sort of media-rich notepad app. IAds tend to cost Janner's Spring Partners more when someone clicks on the banner ad, he said, but it may be driving more sales.

"Even though they're more expensive," Janner, the chief executive, wrote in an e-mail, "the fact that they're new, and that the user can download Springpad without leaving the app they're in has resulted in a better cost per download for us."  (Cost per download is the price the advertiser has to pay on average to get someone to buy or download an app.)

David Smith, who used the program for the Audiobooks Premium app, published a rather lengthy report on his blog last month declaring iAd "disappointing" and "ineffective."  He reported that attracting potential buyers was several times more expensive on iAd than on AdMob.

(Janner said Springo's iAd campaign resulted in a cost per download that was "a small fraction" of Smith's, though Janner declined to get specific.)

Ngmoco, which makes about two dozen popular games including We Rule and Topple, said iAd's pricing is less than ideal, though the company is cautiously optimistic about its early results.

"It's moderately successful, and cost effectiveness is increasing," Clive Downie, Ngmoco's vice president of marketing, said in a statement. "We use many advertising streams so finding the perfect place for iAd in the overall life cycle of a product is still an objective for us."

Still, nearly a dozen iAd developers who spoke with The Times said they were enthusiastic about the fledgling program.

Apple would not provide the number of advertisers or sales data associated with iAd, but the company said  75% of those who bought into iAd for Developers have either renewed their trial or increased their spending.

"We're thrilled by the response to the iAd for Developers program, which is a great way for developers to advertise their own apps to millions of users," said Apple spokeswoman Natalie Kerris.

Chegg-iad"It's fairly early to deem successful, but so far we've seen tremendous traction, and we do plan to continue running," said Tina Couch, spokeswoman for textbook rental service Chegg.com.

Swakker, which makes apps for chatting and collaborative doodling, has both purchased iAds and elected to display them in its apps to collect advertising revenue. Swakker Chief Jack Schneider said the price to buy ads is "reasonable."

"I dislike ads a lot as a consumer so Apple's elegant solution was crucial in persuading me to use the program," Schneider wrote in an e-mail.

Because "it delivers millions of impressions across the perfect audience for our apps," Schneider expects these ads will be more valuable in the long term. That's because he's able to get his logo in front of the eyes that matter most to his company -- iOS app users.

-- Mark Milian
twitter.com/markmilian

Photo, top: Apple Inc. Chief Executive Steve Jobs speaks in front of a display showing icons of various apps during the iPhone OS4 special event at Apple headquarters in Cupertino, Calif., on April 8, 2010. Credit: Robert Galbraith. Image, bottom: Chegg.com's iAd

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