Apple Reduces iAd Rates Even Further By Up to 70%

Apple has been hugely successful with their iPhone and iPad sales, but their advertising platform iAds has failed to make a dent in the industry. Introduced by Steve Jobs last year as part of iOS 4.0, iAds had it rates cut in half back in February of this year, and now according to Bloomberg they’ve been reduced even further.

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.

It appears the initial advertising costs for iAds have not panned out for Apple. The opportunity to target over 200 million iOS users is too expensive and companies are exploring their options for mobile advertising. Not only that, we haven’t heard of developers making big bucks from showing iAds within their apps.

Here’s a refresher of Steve Jobs introducing iAds:

Apple even released an app to showcase apps, iAd Gallery. So far, the platform isn’t available in Canada, only showing a blank ‘test ad’ for Canadian IP addresses.

Maybe Apple should hire Don Draper.