Apple plans to charge close to $1 million for ads on its new iAd network, according to a new report. Citing an unnamed source familiar with the matter, the Wall Street Journal reports that Apple has indicated it may charge as much as $10 million to be part of the initial group of advertisers on the service. Ad executives told the paper they are used to paying between $100,000 and $200,000 for similar mobile deals. Along with the lofty price tag, Apple is also making demands for greater control over advertisers’ marketing campaigns, at least initially. “It’s a hefty sum,” said Phuc Truong, managing director at Mobext, a mobile marketing business 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.”
Despite the pricing, ad executives at agencies across the U.S. have met with Apple in recent weeks to listen to the company’s pitch for iAd. Discussions over possible deals are said to be ongoing, but several ad executives said they are beginning to look at potential creative ideas for iAd campaigns. “It was very easy to think about the several minutes of interaction time consumers can spend with the ad. It’s incredibly attractive,” said Baba Shetty, chief media officer at Boston-based ad agency Hill Holiday. Apple’s demands for creative approval, and that it build the ads itself during the first few months, are giving some agencies pause, however. “As a creative director, I can completely understand that they created this new baby and they want to make sure it gets born looking gorgeous,” said Lars Bastholm, chief digital creative officer at WPP’s Ogilvy. “But as a creative director, I don’t feel completely comfortable letting Apple do the creative.” According to the report, marketers will be able to target ads to users based on past download preferences from the iTunes Store, and by location; Apple is planning to charge one cent each time a consumer sees a banner ad, with a $2 charge if the user taps on the banner.